www. centralnic - WordPress.comIn June 2014, CentralNic acquired the trade of Internet.bs...

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Annual Report 2014

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CentralNic’s global business footprint

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Designed and produced by fourthquarter.co.uk

Contents

Highlights 1

Introduction to CentralNic 2

CentralNic’s key advantages 4

Chairman’s statement 8

Chief Executive’s report 10

Strategic report 12

Chief Financial Officer’s report 15

Board of Directors 18

Directors’ report 20

Corporate governance 24

Remuneration report 27

Independent Auditors’ report 30

Financial statements 31

Shareholder information 65

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• A year of rapid Profitable Growth combined with Investingearnings and funds raised at the IPO

• Net revenue grew by 99% to £6.07m (2013: £3.05m) – growingrevenues from registry, registrar and enterprise services

• Adjusted EBITDA grew by 70% to £1.72m (2013: £1.02m) –reflecting strong revenue growth offset by additionalcosts invested in the fledgling in-house registrar andenterprise businesses

• Ranked as the world’s Number Two new TLD registry providerby volume – launched 8 new generic Top-Level Domainsduring the year, including the leader by volume, .xyz;

• Entered the global top 30 domain retailers via the Internet.BSacquisition in June 2014 and numerous launches ofTLD-specific retail stores

• Acquired a 12% Equity Stake in Accent Media Limited, thesuccessful applicant for the highly sought-after .tickets newTop-Level Domain

• Finished the year with 3 profitable operating divisions: registryservices, registrar services and enterprise services (including thepremium domains business created in the second half of theyear) – reflecting a diversified and resilient business model

Highlights

CentralNic Group Plc Annual Report 2014 1

2 CentralNic Group Plc Annual Report 2014

CentralNic’s businessesCentralNic Group plc (LSE: CNIC) (“CentralNic”)is one of the world’s leaders in the domain nameindustry, supplying domain names and relatedsoftware and services through three profitabledivisions: wholesaling domains as a business-to-business supplier (the “registry” division) ; retailingdirectly to end-users (the “registrar” division); andselling to enterprise clients (the “enterprise” division).

Headquartered in London, the business operates globally, withcustomers in almost 200 countries. CentralNic’s goals includegrowing the volume of transactions supported by its technologyplatform via sales and marketing activities, increasing theinventory of domain names supported by winning new servicecontracts, and by extending the scope and scale of itsdomain-related activities, including via acquisitions.

The CentralNic registry platformCentralNic’s registry services (wholesale) business provideshigh quality technical and operational services, via itsproprietary domain provision, billing and cash collection platform.The platform enables retailers around the world to sell anincreasing range of internet domains, and supplies the coreinternet infrastructure (“DNS”) that powers the domains thatCentralNic distributes. Gross Billings represent the total valueof invoices raised on CentralNic’s platform, while Net Revenuereflects CentralNic’s share of the Gross Billings.

CentralNic’s exclusive wholesale inventoryDomain names are registered by end users for various reasons:not only to build websites, but for email, to protect their brandor business name, to capture online traffic, and for investment.In the most sophisticated markets, even small companies andindividuals often own portfolios of domain names.

CentralNic finished the 2014 year with domains using 43different suffixes distributed exclusively via its platform.CentralNic’s platform supports all three categories of domainname extensions. The best known of these are new genericTop-Level Domains (“gTLDs”), that are alternatives to .com and.org currently being introduced under the auspices of internetregulator ICANN. At the end of 2014 CentralNic had launchedeight new gTLDs, and was ranked second among Registry“backend” operators, with over 700,000 domains undermanagement – representing roughly one in five new gTLDdomains registered. This ranking is due largely to the greatsuccess of .xyz – the new TLD with by far the greatestnumber of registrations.

Despite the high profile and future promise of new TLDs,CentralNic actually earned more revenues in 2014 from itsgrowing portfolios of the other two types of domain suffixes:country code Top-Level Domains (“ccTLDs” ) and Second LevelDomain extensions (“SLDs”). CentralNic launched two SLD

suffixes in 2014 – the global .co.com and .com.se for Sweden –ending the year with 33 SLD domain extensions. CentralNic isalso the exclusive platform for .LA (the country code for Laossold in Los Angeles, Latin America and China) and .PW (thecountry code for Palau sold as “Professional Web”).

At the time it was listed on AIM in September 2013, CentralNicprojected that it would win a total of 15 exclusive contracts todistribute gTLDs via its global wholesale platform. It is nowconfirmed to have 26 such agreements, as it has proven itsability to attract new clients previously contracted to rivalservice providers. Most notably in 2014 CentralNic wonthe Radix Registry distribution business, including the newtop level domains .online, .site, .tech, .website, .press,.space and .host.

In 2014, CentralNic also invested in and won the distributionbusiness for the .tickets TLD – an innovative new use of atop-level domain to allow venues, artists, sports teams andother rights holders to retail tickets direct to consumers,while giving consumers the comfort of knowing that anywebsite using a .tickets domain is legitimate.

Registrar servicesIn 2014 CentralNic expanded its scope of activities to accessretail margins in the domain name supply chain, by takingadvantage of recent regulatory changes enabling domain nameregistry operators to also become retailers of domains.

CentralNic’s TLD Registrar Solutions (“TRS”) registrar businesslaunched 7 “flagship store” retail websites to sell domainnames ending with the suffixes .asia, .bar, .build, .london,.luxury, .menu and .rest.

In June 2014, CentralNic acquired the trade of Internet.bs(“IBS”), one of the world’s top 30 registrars in terms of domainsmanaged, with a global customer base and service offeringsin 8 different languages. IBS is an established business whichhas grown profitably under CentralNic’s ownership.

Enterprise servicesIn addition to clients seeking retail distribution for their TLDs,CentralNic also provides technical services to companiesseeking their own “DotBrand” TLDs to brand their own portfolioof websites. CentralNic’s clients include Global 1000 companiessuch as Saudi Telecommunications and Kuwait Finance House,as well as media and entertainment leaders, The Guardian andthe world’s largest talent agency, William Morris Endeavor IMG.

Towards the end of 2013 CentralNic acquired a high qualitydomain management software product, DomiNIC. The softwareenables the registration and management of domain nameportfolios as well as control of access rights to maintaindisciplined domain management functions. CentralNic hadintended to develop an extension to its software platform to fulfilthis role, and the acquisition of DomiNIC allowed CentralNic toaccelerate this development in a cost effective way.

Introduction to CentralNic

The product of eighteen years of development, DomiNIC is usedby some of the largest corporations in the German-speakingmarkets. CentralNic is developing this software in multiplelanguages with customised versions for corporate customersincluding telcos, financial institutions and DotBrand TLDs, aswell as for domain name registrars.

DomiNIC forms one cornerstone of a suite of software andservices that CentralNic is now offering to corporate clients,including registrar services, various consulting offerings andpremium domain services.

The premium domains business also sits within CentralNic’senterprise division. This business either trades in domain namesor provides broking services to domain investors. This businesscontributed US$2.5m in revenues to CentralNic in 2014,ensuring that all three divisions of the Group were profitable.

TABLE 1Domain extensions using the CentralNic platformlaunched in general availability in 2014

.bar .co.com

.com.se .host

.ink .press

.rest .website

.wiki .xyz

TABLE 2Domain extensions using the CentralNic platformlaunched prior to 2014

.ae.org .africa.com .ar.com

.br.com .cn.com .com.de

.de.com .eu.com .gb.com

.gb.net .gr.com .hu.com

.hu.net .in.net .jp.net

.jpn.com .kr.com .la

.mex.com .no.com .pw

.qc.com .ru.com .sa.com

.se.com .se.net .uk.com

.uk.net .us.com .us.org

.uy.com .za.bz .za.com

TABLE 3Uncontested new TLDs to be launched usingthe CentralNic platformTo be distributed at retail

.college (launched Q1 2015)

.contact

.coop (won in a competitive tender in 2015)

.design (launched Q1 2015)

.fan

.fans

.feedback

.forum

.love

.online

.pid

.realty

.reit

.rent

.site

.space (launched Q1 2015)

.tech

.tickets

“DotBrand” TLDs

.stc .viva

.observer .theguardian .mozaic

.stcgroup .etisalat .kfh

.qtel .wme

TABLE 4CentralNic Group retail websites

www.la

www.buy.menu

www.buydomains.london

www.domains.asia

www.domain.build

www.domains.bar

www.domain.luxury

www.domains.rest

www.internetbs.net



Multiple revenue streamsCentralNic earns four different revenue streams from globaldomain name sales – as a domain owner, a wholesale serviceprovider, a retailer, and as a domain-related service provider tocorporations. Furthermore, CentralNic benefits from the breadth of domain inventory it supports – not only new TLDs, but ccTLDs,SLDs and premium domains. It also offers comprehensive domainmanagement software and value-adding consultancy services.This breadth of services coupled with market demand provides a robust and resilient basis for future growth.

Scalable businessThe registry and registrar businesses operate on automatedplatforms, with largely fixed costs and a history of deliveringhealthy profits. Due to the high levels of automation, theseplatforms are able to scale up to satisfy increasing demandwithout incurring significant additional costs.

CentralNic’s strategy is focussed on achieving growth. Historicallythe business has achieved organic growth in its registry division,and more recently also in its registrar division. Securing newservice provider contracts and focussing on acquisitions presentfurther opportunities to accelerate the growth.

Healthy profits and cash flowsThe business is profitable, with the Group delivering an AdjustedEBITDA margin of 28% in 2014.

The majority of CentralNic’s revenues are recurring, as the endusers for domain names normally pay annual fees to renew them.Software licences can also involve subscription-based fees, againproviding a regular income stream. The business also enjoyshealthy cash flows. It collects revenues in advance for domainregistration fees, which can often be for multiple years.

Distribution networkCentralNic’s global distribution channel is a significant asset,giving it access to over 80% of the global retail market fordomain names (measured by domains under management).

Over the nineteen year evolution of the business, CentralNic hasdeveloped one of the world’s most extensive global distributionnetworks for domain names. Over 1,500 retailers are integrateddirectly with CentralNic’s databases, including the world’s largestand most recognised domain name retailers, such as Go Daddyand Alibaba’s Hi-China. These in turn enable CentralNic toaccess over 100,000 resellers, worldwide.

So far only a small number of registrars have been accredited bythe industry regulator ICANN to sell domain names using newgTLDs. CentralNic and its clients have secured more registrarsactively selling domains using their TLDs than any other registryservice provider – as at the end of March 2015, .xyz, is activelysold via 108 accredited registrars and .website via 104registrars. Both are supported by CentralNic’s technologyplatform. The TLD with the next highest number of activeregistrars has 96.

Premium domain name portfolioCentralNic owns and trades it’s own portfolio of around 20,000premium domain names, and has also been contracted tobroker additional domain names on behalf of third parties.As well as trading inventory, CentralNic owns such valuabletwo-letter .com domains as uk.com, us.com, de.com, cn.comand eu.com which all operate as SLD’s. Two letter .comdomains are highly valued, for example IG.com sold forUS$4.7m in 2013 and MI.com sold for US$3.6m in April 2014.

CentralNic’s key advantages

CentralNic’s multiple revenue streams, scalability, healthy cashflows, expansive distribution network and premium domainassets – combined with its access to funds via the AIM market –position the Company ideally to continue its growth trajectory.


RegistrarsCentralNic’s own registrar websites include: Our distribution network includes:


CentralNic’s key advantages

Brand clientsKuwait Finance HouseKuwait Finance House (KFH) is a pioneer of the bankingphenomenon known as Islamic Finance. They are the firstIslamic bank established in the State of Kuwait, and today theyare one of the foremost Islamic Financial Institutions in the world.

EtisalatOne of the global telecommunications industry’s innovationpacesetters, Etisalat is the Middle East’s leadingtelecommunications operator and one of the largest corporationsin the six Arab countries of the Gulf Cooperation Council, witha market value of approximately Dh97 billion (US$26 billion).Etisalat is pioneering several advanced “green” technologiesand is a regional leader in providing environmentally-friendlyinformation and communication solutions.

Saudi Telecom Company (STC)STC is the largest telecommunications services provider in theMiddle East & North Africa. It is the leading operator within theKingdom of Saudi Arabia, and its international presence extends to11 countries. They hold a strong market position in Saudi Arabia,with an expanding presence in key regional growth markets.

The GuardianPublished by Guardian News & Media (GNM), The Guardiannewspaper's groundbreaking journalism and innovation wererecognised at the Press Awards 2011 where it was namedNewspaper of the Year. In recent years the Guardian hassignificantly developed and expanded its digital operations.In June 2011 Guardian News & Media announced plans tobecome a digital-first organisation, placing open journalismon the web at the heart of its strategy.

OoredooFormerly known as Qtel Group, Ooredoo are a leadinginternational communications company delivering mobile, fixed,broadband internet, and corporate managed services tailored tothe needs of consumers and businesses across markets in theMiddle East, North Africa and Southeast Asia. Ooredoo havea customer base of 107 million and reported revenues ofUSD 9.1 billion in 2012.

NAREITNAREIT®, the National Association of Real Estate InvestmentTrusts®, is the worldwide representative voice for REITs andpublicly traded real estate companies with an interest in U.S. realestate and capital markets. NAREIT's members are REITs andother businesses throughout the world that own, operate, andfinance income-producing real estate, as well as those firms andindividuals who advise, study, and service those businesses.

WMEWilliam Morris Endeavor (WME) is the world’s largest diversifiedtalent agency, with offices in Beverly Hills, New York City,London, Miami, and Nashville. WME represents artists across allmedia platforms, specifically movies, television, music, theatre,digital and publishing. WME's artists have had a huge impact onthe live touring industry, leading Billboard to name the company"Top Touring Agency” of 2012. The agency also represents theNFL (National Football League).


TLD clientsDaniel NegariDaniel Negari, CEO of XYZ, is the youngest registry operator inthe world. XYZ successfully launched the #1 new gTLD, .xyz,in 2014 and is currently launching .College. XYZ has recentlyannounced its acquisition of .rent. With the global success of hisTLDs, Negari has been featured in major publications such asThe Telegraph and Live on Fox Business.

Raymond KingRaymond King is the CEO of Top Level Design – the companyresponsible for launching .wiki and .ink in 2014. Through TopLevel Design, King is now in the process of launching .designwhile still pursuing bids for .gay, .art and .llc. King is also Directorof ICANNWiki, and Founder and former CEO of Snapnames.

Punto 2012Headed by father / son team Carlos and Aaron Grego, Punto 2012operates .bar and .rest – the global domains for bars and restaurants.Firmly entrenched in the hospitality industry, The Gregos also runMexico City’s premier restaurant guide, Queremoscomer.com,as well as various other ventures focused on facilitating onlinepresence for businesses in the hospitality world.

Jay WesterdalJay Westerdal is behind the new .feedback TLD which is slated tolaunch in 2015. Westerdal also owns .contact, .pid and .realtyand is a successful high tech business entrepreneur and investor,with his last sale being valued at over 16 million US dollars.

Joshua MerchantJoshua Merchant is a Managing Director for the new .love TLD. Mr.Merchant is also a Lawyer with Merchant Law Group LLP, a firmwell-known for innovation and fostering good business relationships.

RadixRadix is one Asia’s largest new gTLD applicants, having appliedfor 31 new Top Level Domains. To date Radix has rolled outlaunches for .website, .press, .host and .space and will belaunching coveted TLDs like .online, .site and .tech in theupcoming year. Radix also runs the successful .pw namespace.

Asiamix DigitalAsiamix Digital is a Hong Kong company formed with a specificpurpose to apply for a number of new TLDs to ICANN andoperate a TLD registry. Currently, Asiamix Digital is preparing tolaunch .fan and .fans TLDs.

Co.comLed by well-known domain entrepreneurs Ken Hansen,Paul Goldstone and Gregg McNair, .co.com is the solution fornew businesses looking for a strong, short and unique domainwith a .com ending.

Dot LA Marketing CompanyDot LA Marketing Company is the official marketing entity for.LA which is retailed through leading domain registrars such asGoDaddy, United Domains and 123-reg.

Africa.comAfrica.com is the fastest growing Africa-related website, withabout five million page views per month from visitors in over200 countries throughout the world. The site was establishedby Teresa Clarke – who launched the .africa.com domain as“the .com for Africa” in 2012.

In 2014 the Group has successfully transitioned its business tooffering a range of domain-related services as a wholesaler,retailer and supplier to enterprise customers. This provides theGroup with multiple opportunities in the domain name supplychain at a time of considerable change within the industry.John Swingewood Chairman

2014 has been a very good year for the Group, successfullyacquiring and investing in exciting new business opportunities.The Group also invested in strengthening the leadershipcapabilities within the business. For these reasons, the Groupis well positioned to take advantage of the new TLD market asit develops, and I am extremely pleased with our strategicprogress during the year.

In 2014 the roll out of the new Top-Level Domains gathered pace,with approaching 500 new domain extensions having launchedby the end of the year. The Group successfully launched 8 newdomains during the year, including the programme’s highestvolume domain .xyz, resulting in CentralNic taking a leadingposition among the world’s domain registry service providers.In parallel to this activity, the Group’s existing portfolio of SecondLevel Domains continued to exhibit revenue growth which waspleasing in the context of new competition in the market. Overallour registry business continues to grow profitably, enabling usto invest in developing our other business lines.

As highlighted in the previous year, our strategy includesinvesting in opportunities within the domain name industry. In2014 we acquired the retail trade of Internet BS and a minorityequity stake in Accent Media, the successful applicant for themuch sought-after .tickets new Top-Level Domain. Both presentvery promising earnings-enhancing opportunities.

PerformanceI am pleased to report that the Group’s financial performancewas in line with expectations, growing revenues and AdjustedEBITDA whilst also investing to expand the scope of theGroup’s business activities.

The Group’s net revenue grew by nearly 100%, reflecting steadyorganic growth in the registry business, a half year of revenuesfrom our acquired retail business and trading valuable premiumdomain names on the aftermarket, a new venture for the Group.

It was encouraging to see net revenue from our registrybusiness (wholesale) growing to £2.8m, an increase of 8% overthe prior year (2013: £2.6m). Growth included early revenuesfrom the new top level domains combined with steadyperformance from CentralNic’s legacy portfolio of Second-LevelDomain extensions (including the likes of .uk.com, .us.comand .cn.com) and country codes like .LA and .PW.

CentralNic invested during the year, acquiring the Internet.BSregistrar in June for a total consideration of up to US$7.5m.This marked a significant entry into the retail market for the Group,seeking the benefits of vertical integration within the domainname supply chain. As a result, the Group’s retail activitiescontributed £1.6m of net revenues during the second half ofthe year in line with the business case. A second significant

Chairman’s statement



investment was acquiring a 12% equity stake in Accent MediaLimited for US$1.6m in September. Accent Media is thesuccessful applicant for the .tickets new Top-Level Domain,which is scheduled to launch in 2015.

Other new activities launched during the year included anenterprise division focussed on providing domains, domain relatedsoftware and services to the corporate market. This divisionincludes a premium domains business which began trading in thesecond half of the year, selling domains from the Group’s portfolioto contribute £1.6m to Group net revenues. The remainingenterprise business closed the year in the pre-revenue phase,although indications are promising for the future.

The Group also continued its investment programme during theyear, expanding its resources to grow its in-house registrarbusiness and commence the enterprise business as well asfurther strengthening the Board and the management team.Despite these additional operating costs, the Group deliveredAdjusted EBITDA of £1.72m (2013: £1.02m) and net cashflowfrom operating activities of £1.41m (2013: £1.13m)

DividendIt remains the Directors intention to recommend payment of adividend when appropriate and commercially prudent to do so.

While it is the intention of the Group to generate income returnsfor investors in the future as part of a progressive dividendpolicy, due to the continued expansion opportunities within thesector the Directors do not propose a final dividend in 2014.

OutlookThe Group is strongly placed to benefit from the re-organisationof the internet namespace, with access to earnings fromdomains as both a wholesaler and retailer in the primary marketsand as a broker in the secondary market. Furthermore, theGroup is exposed to both developed and emerging economies,being active in those markets either directly or via the Group’sextensive distribution channel. With the world’s internet usersestimated at 3.1bn, there is still more than half of the globalpopulation who are yet to get online. As such, continuingsustained growth in the world’s internet users presents uswith considerable opportunity.

It is fair to say that current demand for the new Top-LevelDomains is still at a very early stage, reflecting only thebeginnings of consumer awareness to the choices availablewhen seeking to purchase domain names. Awareness shouldgrow in 2015 with an increased retail footprint and the expectedlaunch and promotion of new Top-Level Domains by the

so-called “super-brands”. This has potential to stimulate growthfor alternative TLDs and that will benefit the Group – whetherthis be via the Group’s proprietary Second Level Domains or viathe new Top-Level Domains serviced on behalf of clients. Sincethe end of 2014, the Group has started to launch four moreTLDs and has a minimum of 22 further new Top-Level Domainsyet to launch, with the majority expected to start earningrevenues in 2015. Plus the business continues to secure newTLD clients, converting from a healthy pipeline.

The registrar business also presents considerable opportunitiesin terms of diversifying the revenue streams into othervalue-added services. Work is under way to broaden theGroup’s retail offerings with a view to delivering a morecomprehensive set of services for consumers seeking todeploy their online presence.

Demand for domain names and related services fromCorporates is also a market segment presenting considerableopportunity. The Group has built out the solutions it can offer tothis enterprise segment, whether this be via the proprietaryDomain Management software (DomiNIC) and related domainportfolio services or via consultancy offerings to Corporates whothemselves applied for their own .brand Top-Level Domain.Coupled with Corporate demand for premium domain namesthe Group is able to present comprehensive solutions for theCorporate segment of the market.

I would like to thank CentralNic’s personnel for their professionalismand commitment to the ongoing development of the business inwhat has been a period of considerable progress for the Group.

It is thanks to them, working in tandem with our clients and ourdistribution channel partners, that we continue to enhance ourindustry leading position and reputation.

John Swingewood Chairman28 April 2015


During 2014, CentralNic was transformed from a companywith one line of business, to having three profitable divisionsin the domain name industry – registry, registrar andenterprise solutions. CentralNic also emerged in 2014as an early global leader in new Top-Level Domains –the largest restructuring of the internet to date.Ben Crawford Chief Executive

Performance overviewCentralNic has made significant progress in 2014. Billingswere £9.89 million, representing a 154% increase on 2013;revenues were up 99% to £6.07 million, and Adjusted EBITDAof £1.72 million was achieved – an increase of 70% over 2013.This growth is the result of our threefold strategy: firstly as awholesaler, launching our first eight TLDs together withcontinued growth in our legacy domains business. Secondly, weacquired the trade of domain retailer Internet.bs and launchedseven additional retail websites – adding retail revenues andprofits. And thirdly, our enterprise division started successfullytrading in premium domain names and offering consultingservices, also contributing both revenues and profits in itsfirst year of trading.

At the end of a year of launches, investments and acquisitions, theGroup had cash balances of £3.06 million (2013: £4.93 million).

New top-level domains2014 witnessed the earliest launch stages of what the internetindustry regulator ICANN called “the biggest change since theinception of the internet,” with the introduction of the new gTLDprogramme, allowing new entrants to join the ranks of .com,.org, and .net. Only a small number of retailers received their

accreditations from ICANN to sell domains under the new TLDsin 2014, and a lack of public awareness pending the launchesof the “superbrand TLDs” such as .google, .apple and .sony,meant that the market for new TLDs in 2014 was softer thanhad been projected by ICANN and other industry experts. It wasessentially limited to domain investors and other early adopters.

However, CentralNic fared exceptionally well with the TLDscontracted exclusively to use our technical and billing platform.The eight new TLDs we launched represented less than 2% ofthe total number of top level domains launched, yet we achievedand maintained the ranking of the world’s Number Two new TLDregistry provider by total number of registrations with almost 20%global market share. We are also pleased to rank as the world’sNumber One for the highest number of active retailers for anyone TLD. CentralNic’s client .xyz is the TLD with the overallhighest number of registrations, based on an aggressive globalsales and marketing campaign supported by CentralNic.

Business developmentWhen CentralNic listed on the AIM market in 2013 our clearlystated objective was to accelerate our growth by focussing onthe full gamut of revenue opportunities in the domain industry,and not relying solely on the new Top-Level Domains already

Chief Executive’s report


contracted with us. Considerable progress was made in 2014in realising those objectives:

1. Adding new domains to our inventoryWhen CentralNic listed, its expectations were to obtaindistribution contracts for an additional five domain extensionsover the ensuing two years. This objective was actually met byApril 2014 with .co.com, .website, .press, .space and .host,and we have now been awarded a further eleven exclusive TLDcontracts: .coop, .design, .fan, .forum, .love, .online, .realty,.rent, .site, .tech and .tickets – all expected to launch in 2015and 2016. CentralNic is also an investor in Accent Media Ltdwhich holds the exclusive rights to the .tickets TLD, which willhave an exposure to actual ticketing revenue as it bundlesticket vending software with a domain name.

Today, in my opinion the portfolio of new TLDs available viaCentralNic is second to none, and we hope to augment theportfolio further by converting additional opportunities fromour sales pipeline.

2. Increasing our global retail market coverageWhile relatively few retailers are actively selling domains using newTLDs at this stage, CentralNic is efficiently engaging with thosethat are already part of our global network, and on-boarding thosethat are not – working with our partners to become a clear leaderin the industry, as measured by the metric “highest number ofretailers for an individual TLD.” China continues to be CentralNic’sfastest growing geographic market, with other emerging marketsalso presenting a key focus for our growth.

3. Entering the retail marketplace ourselvesCentralNic was one of the earliest adopters of vertical integrationin the domain industry in 2014 when it joined the ranks of theworld’s top thirty domain name retailers by acquiring the trade ofregistrar Internet.bs (“IBS”), serving customers from 200 countriesin eight languages; and at the same time it launched seven“flagship store” websites, each retailing domain names targetedat a single territory or industry vertical (such as domains.asia andbuydomains.london; domain.luxury and domain.bar).

4. Engaging with growth marketsCentralNic has identified two key growth markets, and isengaging with both.

The first is the enterprise market: with around 400 globalcorporations which have applied to obtain their own brands asTop-Level Domains, and thousands more starting to focus onthe challenges and opportunities presented by an increasinglycomplex and important Domain Name System, CentralNic isselling a suite of software and services to an increasing numberof telcos, banks, and media and entertainment businesses,both at Global 1000 level and below.

Secondly, CentralNic is focussed on developing economiesincluding China and countries in the MENA region. As bothtelecoms companies and major internet infrastructure providerswork to deliver internet access to “the next five billion” internetusers, CentralNic is attuned to the resulting new opportunities toassist businesses in those territories to acquire domain namesand get their businesses online to serve their rapidly expandinglocal and international markets.

OutlookCentralNic is on a continuing rapid growth trajectory. Havingdoubled revenues and increased Adjusted EBITDA by 70%in 2014, our strategy is working and we continue to moveforward accordingly.

Though 2014 marked a slow start to the roll-out of new Top-LevelDomains, CentralNic’s clients accounted for one in five of all newTLD domains registered – and that was with only the first eight ofour TLDs launched. CentralNic has another eighteen TLDsalready confirmed for retail distribution, including those widelypredicted to be the future bestsellers: such as .design and.online. Plus we have a healthy pipeline of future opportunities.

Moreover, with so much new product to take to market, it is agreat time to be a domain name retailer, and CentralNic’s retaildivision expects continued growth in its chosen markets.

Finally, CentralNic’s focus on large corporations and governmentcontracts makes us part of the two leading growth drivers ofthe domain industry – enterprises entering the domain industryand developing world Governments supporting the expectedrapid expansion in mobile-enabled internet use to enableeconomic development.

In 2014, CentralNic demonstrated the ability to launch newbusinesses, win new service contracts and successfullyintegrate new acquisitions. We are confident in our ability touse these same strategies to meet our commercial objectivesin the years to come.

Ben Crawford Chief Executive Officer28 April 2015

Strategic report

The registry divisionThe registry division includes the core of CentralNic’s legacybusiness, which continued to grow in 2014 against a backdropof multiple new competitors entering the market. CentralNiccontinues to actively market domains with suffixes including.us.com, .uk.com and .la – which derive healthy revenues whencompared to most of the new TLDs. The domains often presentan alternative choice for consumers, especially if their first choiceof domain is not available in other TLD’s; while these domainsare suitable for international markets, such as in the Far Eastwhere growth rates typically exceed those in more developedwestern markets.

We believe that our well established registry infrastructure,distribution network, flexible implementation approach andexpertise in launching domains has presented CentralNic’sclients with a considerable competitive advantage. While still inthe earliest stages of launch – with only around 100 onlineretailers and none of the large corporate “anchor tenants” ofthe new TLD programme yet launched (ie. .google, .apple,.sony, .walmart, etc.) – CentralNic has succeeded in gainingalmost 20% market share of all registrations under new TLDswith only 8 of its clients’ gTLDs launched; representing over

700,000 registrations at the end of 2014. Gross billings in theregistry business grew to £6.41m (2013: £3.47m) as a result.

CentralNic has been successful in partnering with entrepreneurinvestors in new TLDs who have the business skills andresources to build successful businesses but require theexpert technical, policy and sales and marketing support thatCentralNic provides. Both CentralNic and its clients havebenefited from these complementary relationships. Notably,CentralNic’s client TLD .xyz is the clear frontrunner among allnew TLDs launched to date in terms of volumes of registrations.Through an aggressive global channel sales and marketingcampaign, .xyz has also consistently secured more registrarsactively selling its domains than any other new TLD, and isnotably achieving excellent sales in the fastest growingmarket in the world, China.

CentralNic’s inventory of new gTLDs as yet unlaunched at theend of 2014 was projected at seven when CentralNic listedon AIM in September 2013, but it is rapidly growing and isalready confirmed at 22. This growth is due to CentralNicsecuring the business of additional clients who have chosen tochange their registry service providers (for example, by securing

CentralNic entered 2014 a wholesaler with no gTLDs launched,and ended 2014 with double its previous revenues, threeprofitable trading divisions, and as the number two globalplayer among its peers in gTLDs.


.bar and .rest launch party

the Radix Registry business, CentralNic obtained exclusivewholesale distribution rights to the TLDs .website, .site, .online,.host, .space, .press and .tech). In other instances, CentralNic’sentrepreneur clients acquired other gTLDs and brought themto CentralNic.

In the case of .tickets, CentralNic was attracted by the innovativebusiness proposal for deployment of the domain. As a result,CentralNic invested £1 million to acquire 12% of the equity ofAccent Media Ltd, the registry operator for the .tickets registry.Accent Media then contracted with CentralNic to become theexclusive wholesale distributor. The business model for .ticketsincludes a share of ticketing revenues as well as domain namesales, and CentralNic expects to see early revenues in thesecond half of 2015.

CentralNic’s registry strategy moving forward is a continuation ofthe current activities, namely: active sales and marketing ofCentralNic’s legacy domains; close collaboration with itsentrepreneur clients to maximize sales of their domains; and afocus on bringing more clients and TLDs to the CentralNicplatform. As consumer awareness and demand for domainnames grows in future years, CentralNic’s registry division isideally positioned to benefit.

The registrar divisionThe removal of restrictions by ICANN over common ownership ofregistrars and registries was an important development, enablingCentralNic to enter the retail business with a dual strategy tocapture retail margins from domain sales and enter into directrelationships with end users. Firstly, CentralNic created TLDRegistrar Solutions, focussed on the opportunity to launch“flagship store” single-domain retail websites under the new gTLDprogramme. Examples of these include buydomains.london,domain.luxury and cymru.domains. Seven of these werelaunched in 2014 with a view to becoming established vendorsof domains and other internet-related services for specificterritories or industry verticals, with revenue benefits to flow infuture years as the new gTLDs grow in demand.

The second strand of CentralNic’s retail strategy was theJune 2014 acquisition of the trade and assets of Internet.bs,a top thirty accredited retailer selling domain names to a globalcustomer base of end users. Internet.BS is a profitable, cashgenerative business which had delivered operating profitsof US$730,000 for the year ended 31 December 2013.Profits have grown under CentralNic’s ownership, enhancingGroup earnings (before acquisition deal fees).

Key strategic drivers for the acquisition included:• Gaining a proven retail platform already supporting 28,000users in eight languages, making it a highly suitable platformfor entering emerging and fast-growing markets globally;

• Enhancing the revenues and profits of CentralNic with anadditional cash generative business retailing domains toconsumers and other domain name retailers;

• Providing a retail platform able to support future sales ofadditional retail products such as hosting, email, and websitebuilders, as well as new Top-Level Domains.

CentralNic’s strategy for the registrar business is to continueaggressive growth following the direction started in 2014,optimizing the benefits of scale and vertical integrationwhile seeking out opportunities for further expansion inemerging markets.

The enterprise divisionIn addition to its entrepreneur clients, CentralNic has contractedto provide technical and ICANN compliance services to brandowners, who themselves have applied to register their brands asnew Top-Level Domains. Our client portfolio includes such Global1000 companies as Etisalat (the Emirates Telecommunicationscompany), Kuwait Finance House, and Saudi Telecom, as wellas media and entertainment leaders, The Guardian and WilliamMorris Endeavor IMG. These clients form one of the foundationsof CentralNic’s enterprise division, launched in 2014 to supplycorporations with the software and services they require tobenefit from changes to the Domain Name System and relatedtechnologies.

The second pillar of CentralNic’s new enterprise division wasthe acquisition of a sophisticated domain management softwareplatform, called DomiNIC, in December 2013. The software isregarded as one of the world’s leading applications, used by anumber of major corporates in the German-speaking world tomanage their portfolio of domain names, as well as by domainretailers. CentralNic has been building a pipeline of futurepotential users outside the German-speaking markets.CentralNic has also invested in adapting DomiNIC for use bybrand TLD applicants, and has started engaging with potentialclients in 2014, with a view to taking orders when the Dot Branddomains start to launch over the coming years.

As a third component of its enterprise offering, CentralNiclaunched its own premium domain name trading service in2014, as a direct route to selling premium priced domain namesto corporate clients. The inventory being sold includes domainsfrom CentralNic’s own portfolio of around 20,000 premiums,premium domain inventory from clients, and other inventory forwhich CentralNic can secure exclusive broking rights. Thisactivity resulted in revenues of £1.61m in 2014, resulting in aprofit for the enterprise division in its first year of trading.

With the entry into the domain name business of around 400new corporations through the Dot Brand TLD programme, andthe need for large companies globally to adapt to the majorchanges in the expansion of the Domain Name System,CentralNic is confident that its enterprise division puts it at theforefront of an important, highly scalable and potentiallydisruptive change to the domain industry.


Key Performance IndicatorsDetails of the Key Performance Indicators are provided onpage 15.

Principal risks and uncertainties facing the GroupThe Directors have considered the principal risks and uncertaintiesfacing the Group, the main ones being outlined below.

RegulatoryThe businesses of both registries and registrars are subject tothe legal and contractual environment. These are subject tochange, not least in the ICANN community, and changes havethe potential to influence business outcomes.

CentralNic satisfies ICANN technical and operationalrequirements, and maintains an active voice in the developmentof policy within the ICANN community.

MarketThere is a risk that the market for domains owned by the Groupor for which the Group provides registry and registrar servicesmay not increase as quickly as expected or that the new TLDsmay not generate the revenue levels anticipated by the Board.In either case the Group’s revenues could reduce belowexpectations with an impact on profitability.

The risk is mitigated to a degree by operating multiple lines ofbusiness exposed to many markets and segments within thosemarkets, some of which have very little reliance on new TLDs.

IT securityIf the Group does not prevent security breaches or becomessusceptible to cyber-attacks, it may be exposed to lawsuits,lose customers, suffer harm to its reputation, and incuradditional costs. Unauthorised access, computer viruses,accidents, employee error or malfeasance, intentionalmisconduct by computer “hackers”, and other disruptions canoccur that could compromise the security of the Group’sinfrastructure or confidential information.

The Group has created a resilient network infrastructure andDomain Name System server constellation, with failoversecondary systems to ensure critical registry functions aremaintained. The Group has been accredited under ISO27001/2013 for data security, thereby mitigating risk byadherence to international best practice.

Supplier riskA number of the key technical services used by the Group areoutsourced to key suppliers, thereby creating the potential forrisk in the case of the failure or loss of a supplier.

In view of these risks, redundancies have been introducedbetween the suppliers and internal resources, ensuring that nosingle point of failure could result in the inability of CentralNic tomeet its contractual or compliance obligations.

Currency riskThe Group reports its revenues and costs in British PoundsSterling, whilst some of these revenues and costs may arise incurrencies other than this. Fluctuations in exchange rates mayadversely affect the Group’s reported profits, and make itsoverseas contracts relatively less valuable.

CentralNic contracts are usually denominated in British PoundsSterling, US Dollars or Euros and the Directors keep thecurrency exposure under regular review. The Directors considerthe use of hedging instruments in the event that currencyexposure is considered a material performance risk.

Dependence on key personnelThe Group has a small management team and the loss of anykey individual or the inability to attract appropriate personnelcould impact upon the Group’s future performance. Incentivesand a performance culture remain an important focus to theachievement of the Group’s objectives.

Other risk factorsIn addition to the impact of the downturn of the world’seconomies, the Group may be adversely affected by otherchanges in economic, political, judicial, administrative, taxationor other regulatory or other unforeseen matters.

This strategic report was approved by the Board of Directors on28 April 2015 and signed on its behalf by:

John Swingewood Chairman

Strategic report continued


2014 has been a year of investment for the Group, resultingin a more diversified and resilient business model exposedto global domain name markets across multiple marketsegments. The investment has been funded out of the capitalraised from the IPO, combined with profits generated by theregistry business and the acquired registrar business.Glenn Hayward Chief Financial Officer

Chief Financial Officer’s report

The Group has delivered strong performance in 2014 asevidenced by the growth in revenues and Adjusted EBITDA forthe Group. This step-change in the scale of the Group’sactivities reflects organic growth within the registry business,combined with the results of the acquired registrar business andthe successful creation of the enterprise business, includingpremium domain trading.

Key Performance Indicators• Gross billings (including partner share) £9.89m (2013: £3.89m)

• Net revenue £6.07m (2013: £3.05m)

• Adjusted EBITDA* £1.72m (2013: £1.02m)

• Profit before taxation £0.52m (2013: £0.70m)

*Excludes impact of share payment expense for the share options issued toDirectors and Employees and Acquisition deal fees

The Group generated net revenue growth of 99%, with revenueincreasing to £6.07m (2013: £3.05m). This growth wasachieved through the combination of Registry revenues of£2.80m (2013: £2.59m), Registrar revenues of £1.55m(2013: £nil) and premium domain trading generating £1.61mof revenues (2013: £0.07m). Consultancy and other servicerevenues were £0.10m (2013: £0.40m).

Revenue growth in the registry business was driven by acombination or organic growth in the historic business (includingregistration of domains using the Group’s Second LevelDomains such as uk.com, us.com and cn.com) together withthe initial revenues for services provided to new Top-LevelDomains, notably .xyz. The Group has a strong portfolio ofSecond-Level and new Top-Level domains supported by theRegistry Business, with at least 22 more new Top-LevelDomains to launch in 2015 and 2016. Gross billings in theregistry business grew to £6.41m (2013: £3.47m) mainlyreflecting gross billings for the new Top-Level Domains.

Entry into the registrar business was accelerated significantly by theacquisition of the trade of Internet.BS in June. A half year of tradinggenerated the vast majority of revenues in the registrar business,contributing £0.19m to Adjusted EBITDA. The profit performancewas in line with the Board’s expectations on acquisition.

The Group also launched an enterprise division including apremium domains trading business during the second half of theyear. Initial revenues generated through the sale of non-corepremium domain names have been pleasing at £1.61m(2013: £0.07m). The Group owns a trading portfolio of almost20,000 premium domain names and also offers brokingservices to third parties.


Chief Financial Officer’s report continued

Adjusted EBITDA, before the share based payment expenseand acquisition deal fees, totalled £1.72m for the year(2013: £1.02m). The strong profit performance from the registrybusiness, the acquired registrar business and the premiumdomains business contributed £2.55m to Group EBITDA(2013: £0.68m). This was then offset by lower consultancyand licence sales of £0.10m (2013: £0.48m) combinedwith £0.93m of operating costs (2013: £0.15m) taking intoaccount the first full year of costs related to being on AIM aswell as investing in the fledgling new business areas.

Fees associated with acquisitions and investments totalled£0.47m (2013: £nil). Non-cash expenses included amortisationof intangible assets of £0.45m (2013: £0.24m) reflecting thecharge for the customer list and software acquired with theInternet.BS trade. Other non-cash expenses included depreciationand the share based payments expense. In accordance with IFRS2 Share Based Payments, we have included a £0.22m chargefor Director and employee share options within administrativeexpenses (2013: £0.07m). Further details can be found innote 26 to the financial statements.

The Group’s effective tax rate was 30.1% (2013: 24.4%),although when excluding the impact of the non-cash sharebased payments expense this becomes 21.0% (2013: 22.3%).Profit after taxation was £0.36m (2013: £0.53m).

Basic earnings per share at 0.60 pence (2013: 1.00 pence)reflected the effects of investing in the business, driven by theadditional non-cash charges and the non-recurring professionalfees associated with acquisitions and investments. Dilutedearnings per share, at 0.56 pence (2013: 0.91 pence),reflected the share options and warrants issued during theflotation. Further details of the earnings per share calculationsare provided in note 12 to the financial statements.

PensionsThe Group does not currently operate a pension scheme, but iscommitted to complying with latest legislation and will create ascheme under the new auto-enrolment provisions as required inthe UK. The staging date for the Group to adopt the new UKpension obligations is June 2016 and work is under way toimplement the required arrangements.

DividendsIt remains the Directors intention to consider payment of adividend when appropriate and commercially prudent, as part ofa progressive dividend policy. However, due to the continuedexpansion opportunities for the Group requiring investment,the Directors do not propose a final dividend in 2014.

Group statement of financial positionThe Group had net assets of £6.90m at 31 December 2014(2013: £4.81m), with the growth in Net Assets reflecting theshare-based element of the consideration for the acquisitionof the Internet.BS trade combined with the retained profitsfor the year.

Capital expenditure and investing activitiesThis was a year of investment, with capital expenditure totalling£4.33m for the acquisition of the trade of Internet.BS (includingIntangible additions to Software, Customer List and AcquiredGoodwill). Other investing activities included £1.00m investedin a 12% equity stake in Accent Media Ltd, the successfulapplicant for the .tickets Top-Level Domain. The remainingcapital expenditure included £0.13m on plant and equipment(2013: £0.05m) and £0.25m for capitalised developmentand enhancements to DomiNIC, the Domain portfoliomanagement software (2013: £0.21m).

Further details are provided in notes 13, 14 and 16 to thefinancial statements.

Cashflow and net cashThe significant movements in net cash reflected the investmentsmade during the year in executing the growth strategy. Thiscombined with strong underlying cash conversion from AdjustedEBITDA, partly offset by the professional fees for acquisitionsand investments.

Total net cashflow used in investing activities was £3.06m, with£1.58m of net cash consideration for acquiring the trade ofInternet BS and £1.00m for the investment in Accent MediaLimited. The remainder included capitalised softwaredevelopment and a £0.10m short term loan to DNS Xperts,the software developers of the DomiNic software.

Net cash flow from operating activities was £1.41m (2013: £1.13m).This reflected a strong underlying conversion to operating cashflowfrom Adjusted EBITDA, but then offset by £0.47m of professionalfees related to acquisitions and investments.

Financing activities included the final scheduled deferredconsideration payments of £0.23m for the unencumberedownership rights for the gb.com and us.com domain extensions(2013: £0.22m).

Banking facilitiesThe Group ended the year with net cash of £3.06m (2013:£4.93m) and accordingly does not have in place any significantdebt facilities.


Critical accounting policiesThe Summary of the Group’s Significant Accounting Policies isset out in note 3 to the Financial Statements.

The Group’s Revenue recognition policy may be summarised as:

• Revenue from the sale of services is recognised when theamounts of revenue and cost can be measured reliably

• Domain sales are recognised over the period to which theunderlying sales contract relates, which can be for periodsbetween one and ten years. Revenues attributable to futureperiods are deferred to future periods and are included in“Deferred Revenues”

• Revenues from strategic consultancy and other similarservices are recognised in proportion to the stage ofcompletion of the work.

The Group makes estimates and assumptions regarding thefuture, which are regularly evaluated including expectations ofthe future that are considered reasonable given historicexperience and current circumstances. In the future actualexperience may differ from these estimates and assumptions.

The Board considers the carrying value of Intangible assets inparticular given the relative materiality to the Group. While theBoard acknowledges that estimates and assumptions couldhave a material impact on the carrying value of the intangibleassets, the Board has considered the potential for impairmentas well as the estimated useful lives of the assets and does notconsider the carrying values to be impaired. Further details areprovided in note 4 to the financial statements.

Group financial risk managementThe Board reviews the financial risk management policy, notingthat the Group is exposed to market risk, credit risk and liquidityrisk arising from financial instruments. Further details of theFinancial Risk Management Framework is provided in note 27to the financial statements.

The Group’s finance function is responsible for managinginvestment and funding requirements including cash flowmonitoring and projections. The cashflow projections arereviewed regularly by the Board to ensure the Group hassufficient liquidity at all times to meet its cash requirementsand execute its business strategy.

The Group’s strategy is to finance its operations through the cashgenerated from operations and where necessary equity finance.

The Group’s financial instruments comprise cash and various itemssuch as trade and deferred receivables. The Group had £3.06m ofcash at the year-end, with interest bearing financial assets bearinginterest at fixed interest rates. Deposit risk is mitigated by theDirectors setting policy that the Group only places deposits withbanks and financial institutions with high credit ratings.

The Group’s exposure to credit risk from trade receivables isrelatively low, due to the fact that the business has traditionallydealt with customers who generally pay at the point or sale or inadvance. Where there are credit accounts, which is anincreasing trend in the industry, receivables are controlledthrough credit limits and regular monitoring.

Foreign currency riskThe Board notes that the Group predominantly trades in USDollars, Euros and GB Pounds Sterling, and considers theexposure to foreign currency risk to be acceptable. The Groupholds reserves in each of these currencies to meet tradingobligations as required. The currency risk is actively monitoredthrough a periodic review of inflows and outflows by currency,including an assessment of the extent to which currenciesare naturally hedged across the Group’s business lines.Where this is not the case consideration is given to the useof hedging instruments.

Glenn Hayward Chief Financial Officer28 April 2015


Board of Directors

The Board comprises individuals with the appropriaterelevant background and experience to carry out its duties.The Board regards its principal duties to include the provisionof entrepreneurial leadership to the Group, while also managingbusiness performance, compliance and practising goodcorporate governance as appropriate for a Group of our size.

John Swingewood Chairman (aged 59) John is a serial entrepreneur and investor, active in both public and privatecompanies. He is the Chairman of Emizon Group Ltd, an “Internet of Things”technology company. Previously he was director of AIM listed Mobile TornadoPlc and was a founder of Digital Interactive Television Group, acquired by AIMlisted Yoomedia Plc for £28 million. He was formerly Director of New Mediaat BskyB and Director of Internet and Multimedia and General Manager,Broadcast TV Services at British Telecom, a £500 million division employingover 1,000 people worldwide. John obtained a First Class Honours Degreein Electronics at Surrey University.

Benjamin Crawford (“Ben”) Chief Executive Officer (aged 49)Ben Crawford is one of the best-known figures in the domain industry, andis frequently quoted on developments in the internet in the global media.Ben has been the Chief Executive Officer of CentralNic since 2009, successfullylaunching the company into new markets including the Middle East, China,Japan and Russia, entering the gTLD market, listing on the AIM market andachieving growth organically, through winning new contracts and viaacquisitions. Ben is a specialist in global business and corporate development –his former positions included Founding President of Louise Blouin Media,integrating 11 acquisitions in three countries and launching artinfo.com;Managing Director of SportBusiness Group, where he launched the world’sleading online gambling trade media Group, iGamingBusiness.com; andExecutive Producer of the official website of the Sydney Olympic Games.Ben has an MBA from the Australian Graduate School of Management anda First Class Honours Degree from the University of Sydney.

Glenn Hayward Chief Financial Officer (aged 41)Glenn joined CentralNic in February 2014, bringing 20 years’ experienceacross a variety of sectors, with particular experience working with technologycompanies, most notably in the domain name industry. Most recently, Glennworked as Executive Director, Business Development and Finance, for Nominet,the organisation which manages the .uk internet domain. Nominet has a turnoverof £26 million with 130 employees. Glenn has a bachelor’s degree in Physicsfrom the University of Birmingham and between 2011 and 2012 qualified in theInstitute of Director’s Certificate and then Diploma in Company Direction withdistinctions. He also won Finance Director of the Future at the UK’s FinanceDirector Excellence Awards 2011. Glenn qualified as a Chartered Accountantin 1998 while working for Morris & Co Chartered Accountants.


Robert Pooke Executive Director (aged 54)Robert Pooke is one of the founders of CentralNic and has been involved inthe domain name industry since 1998. Prior to that, he founded (and later sold)two online companies, one of which was a multi-player games business.In the earliest part of his career, for 13 years, Robert opened and ran a smallchain of 3 discount retail stores, which he eventually sold.

Samuel Dayani Non-Executive Director (aged 38)Samuel Dayani is a partner at the Joseph Samuel Group and responsible formanaging the Group investments and business development. He is also aDirector of Opes Industries Ltd, a waste to energy, landfill and recyclingbusiness. From 2001-2005, Samuel was the Chief Operating Officer andthen Managing Director of ViaVision Ltd, an interactive TV company, beforeit was sold to Yoomedia plc.

Samuel graduated from Queen Mary College, University of London with aBSc in Business and Biology in 2000.

Thomas Rickert Non-Executive Director (aged 45)Thomas Rickert is an attorney-at-law in Germany. He is the Managing Directorand owner of Rickert Rechtsanwaltsgesellschaft mbH, a law firm in Bonn.Thomas has extensive experience in the domain industry working on domaindisputes as well as advising Registrars, Registry Service Providers and newgTLD applicants both on contractual as well as policy matters. Thomas is anexpert speaker on domain related subjects both at the national and internationallevel. Thomas has been appointed by ICANN’s Nominating Committee to serveon the Council of the Generic Names Supporting Organisation (GNSO), which isthe body responsible for developing policy for generic domain names. He is alsoco-chair of the Cross Community Working Group on enhancing ICANNaccountability in the context of IANA Stewardship Transition.

Thomas Pridmore (“Tom”) Non-Executive Director (aged 43)Tom Pridmore began his career as a solicitor at Norton Rose, specialising incorporate finance, where he acted on behalf of institutional clients in relationto a variety of corporate finance and M&A activities. Tom then joinedFlextech/Telewest Plc as Head of Corporate Strategy, where he wasresponsible for directing investment into strategic Internet and interactivetelevision companies. In 2000, Tom co-founded the international fundmanager and investment adviser Development Capital Management Limited.In this capacity he has set-up and managed real estate investment anddevelopment operations in Turkey, India, North Africa, Eastern Europe andthe UK on behalf of both institutional and private clients.


Directors’ report

Principal activitiesCentralNic Group Plc is the ultimate holding company of aGroup of companies.

The principal activities of the Group are the provision of DomainName registry, registrar and enterprise services. A morecomprehensive description of the Group’s activities, performance,and likely developments are provided in the Chairman’sstatement, the Chief Executive’s Report, the Strategic Report,the Chief Financial Officer’s Report, the Corporate GovernanceReport and the Remuneration Report, which are incorporatedby reference into this report.

A list of the subsidiary undertakings is disclosed in note 16 tothe Financial Statements.

Financial instrumentsDetails of the use of financial instruments and financial riskmanagement are included in note 27 to the Financial Statements.

Results and dividendsInformation on the results and dividends is provided in theChairman’s Statement and the Chief Financial Officer’s Report.

DirectorsThe Company was incorporated on 19 June 2013, with a viewto becoming the Parent Company after admission to AIM. Theadmission was completed on 2 September 2013, and at thistime the Board was expanded.

The Directors who served during the year were as follows:

Executive DirectorsBenjamin Crawford (Chief Executive Officer)

Glenn Hayward (Chief Financial Officer and CompanySecretary – appointed to the Board 10 February 2014)

Donald Baladasan (Chief Financial Officer – resignedfrom Board 10 February 2014)

Robert Pooke (Executive Director)

Non-Executive DirectorsJohn Swingewood (Non-Executive Chairman)

Samuel Dayani

Thomas Rickert (appointed 2 September 2013)

Thomas Pridmore (appointed 2 September 2013)

The biographical details of the Directors are provided on pages18 and 19 of this report.

Two Directors will retire at the Company’s Annual GeneralMeeting, and being eligible will offer themselves for re-election.

The Directors and their interests in the shares in the GroupThe Directors of the Company, and their interests in theshares and share options of the Company, are shown in theRemuneration Report on pages 27 to 29 of this report.

Transactions with any parties related to the Directors aredisclosed in note 24 to the Financial Statements.

Directors conflicts of interestEach Director is required, in accordance with the provisions ofthe Companies Act 2006, to declare any interests that may giverise to a conflict of interest with the Company on appointmentand subsequently as they arise. Where such a conflict orpotential conflict arises, the Board is empowered under theCompany’s Articles of Association to consider and authorisesuch conflicts as appropriate.

Articles of AssociationThe Company’s Articles of Association set out the Company’sinternal regulation and cover such matters as the rights ofshareholders, the appointment and removal of Directors andthe conduct of Board and general meetings.

A copy of the Company’s Articles of Association is available on theGroup’s website (https://www.centralnic.com/investors/reports).

Subject to the provisions of legislation, the Company’s Articlesof Association and any directions given by resolutions of theshareholders, the Board may exercise all powers of theCompany and may delegate authorities to committees andmanagement as it sees fit. Details of the committees of theBoard and their activities are contained in the CorporateGovernance Report on pages 24 to 26 of this report.

The Directors are responsible for the maintenance and integrityof the corporate and financial information included on theCompany’s website.

Principal risks and uncertaintiesThe board’s assessment of the principal risks and uncertainties,together with the mitigating factors are presented in thestrategic report on page 14.


Substantial shareholdersIn addition to the Directors Interests disclosed in theRemuneration Report, and in accordance with Part 22 of theCompanies Act 2006, the Company has been notified that thefollowing shareholder’s interests exceeded 3% of the Company’sordinary share capital in issue at the 31 March 2015:

Ordinary shares Percentage

Erin Invest & Finance Ltd 21,630,382 35.35%

UBS Private BankingNominees Ltd (R Pooke) 8,400,581 13.73%

Jabella Group Ltd 5,687,891 9.30%

Schroder InvestmentManagement 5,090,909 8.32%

Christian Phillips 4,750,000 7.76%

Natwest FIS Nominees 3,699,000 6.05%

Unicorn Asset Management 3,188,181 5.21%

Marco Rinaudo 2,090,738 3.42%

No substantial shareholders have different voting rights to otherholders of the share capital of the Company.

Corporate governanceThe Corporate Governance Report, on pages 24 to 26 isincorporated into this report by reference.

Corporate responsibilityThe Board recognises its employment, environmental andhealth and safety responsibilities, and devotes appropriateresources towards monitoring and improving compliance withexisting standards.

Management and staffCentralNic’s management team has been assembled toensure the Group has the number of people and range of skillsrequired to deliver the business strategy. The team is diverseand brings functional expertise across a number of disciplinesincluding technical and operational delivery, finance, law,marketing and sales.

While the business is managed under budgetary controls, theDirectors focus on ensuring there is succession planning inplace as is appropriate for a business of our size. We alsoensure there is regular communication of information affecting

our managers and their teams, to ensure all employees arekept up to date with issues affecting them.

Our staff and key consultants represent a number of differentnationalities, and we are also pleased by the gender diversityin our business.

The executive leaders within the business recognize theimportance of engaging with our employees and do so informallyon a day to day basis. We often use a cascade approach toemployee communications, with the heads of departmentsdisseminating appropriate information to their teams, includingthose located elsewhere around the world.

While we do not believe that human rights issues are asignificant risk to our business currently, we are conscious thatas we expand into new international markets issues of humanrights may become more significant. The Directors keep allaspects of business development under review, and act withcaution and integrity to ensure all our activities and specificallybusiness development activities are respectful of human rights.

The Board recognises the importance of engaged employeesworking within the Group and how they are vital to the futuresuccess of the business. However, given the size of the Groupthere is dependency on a few key individuals and this isdiscussed further in the Risks and Uncertainties on page 14.

The Group is committed to achieving equal opportunities and tocomplying with anti-discrimination legislation. The Group iscommitted to offering employees and job applicants equal andfair opportunity to benefit from employment without regard totheir sex, sexual orientation, marital status, race, religion orbelief, age or disability.

Communication with employees is primarily through formal andinformal meetings and through the use of the Group’sinformation systems.

The Group has a policy of share participation at all levels.

Quality accreditationsCentralNic is both ISO 27001 (information security management)and ISO 9001 (quality management system) accredited.These accreditations are internationally recognised and provideCentralNic’s partners with additional levels of assurance as tothe technical integrity of the Group’s IT systems.


Directors’ report continued

Anti-bribery and corruption complianceCentralNic conducts business ethically, maintains financialintegrity and behaves responsibly in our business dealings.

The Group Directors and its senior management are committedto ensuring strict adherence to our anti-bribery and corruptionpolicy, and compliance with anti-bribery and corruption laws.

All Directors, employees and consultants have received trainingsessions in maintaining the highest standards of professionalconduct and are aware of the need to carry out business fairly,honestly and openly. Clear lines of communication andresponsibility are in place to report any incidences orsuspected incidences of abuse to provide an effective,trusted reporting mechanism.

EnvironmentThe Group is committed to operating in an environmentallyresponsible manner. The Directors consider environmentalimpact when making decisions.

The community, charitable and political donationsThe Directors consider the impact on the community whenmaking decisions.

During the year charitable donations totalling £150 were made toWaterAid UK, a charity that works specifically to improve watersanitation and hygiene in the developing world (2013: £650).

The Group made no political donations during the year, either inthe UK or overseas.

Policy on the payment of creditorsThe Group’s policy is to agree terms and conditions for itsbusiness transactions with suppliers and to endeavour to abideby these terms and conditions, subject to the supplier meetingtheir obligations.

No one supplier is considered to be essential to the businessof the Group.

Health and safetyThe Directors and senior management are committed toproviding for the welfare, health and safety of the Group’semployees and have procedures in place, including regularmonitoring by third party specialists, to ensure compliancewith our legal and contractual obligations.

Business continuityThe Group has built a resilient technology infrastructure,designed to provide data security and continuity of service.The Board recognises the importance of resilience to cyberthreats and invests in primary and secondary data centres alongwith a distributed domain name server constellation operatedby the Group and third party providers. The Board keeps theinfrastructure requirements under review and adopts acontinuous improvement approach to further investment, withinappropriate parameters, as business activities expand. Thetechnical provision, alongside customer support, is consideredone of the most significant aspects of Business Continuity.

Statement of Directors responsibilities in respect of theAnnual Report and the Financial StatementsThe Directors are responsible for preparing the Annual Reportand the financial statements in accordance with applicable lawsand regulations.

Company Law requires the Directors to prepare both theGroup and Parent Company financial statements for eachfinancial year. As required by the AIM Rules of the London StockExchange they are required to prepare the Group financialstatements in accordance with International Financial ReportingStandards (IFRSs) as adopted by the EU and applicable law.The Parent Company financial statements have been preparedunder UK GAAP.

Under company law the Directors must not approve thefinancial statements unless they are satisfied that they give atrue and fair view of the state of affairs of the Company and theGroup and of their profit or loss for that period. In preparingeach of the Group and Parent Company financial statements,the Directors are required to:

• Select suitable accounting policies and then apply themconsistently;

• Make judgements and estimates that are reasonableand prudent;

• State whether they have been prepared in accordancewith IFRS as adopted by the EU; and

• Prepare the financial statements on the going concern basisunless it is inappropriate to presume that the Group and theParent Company will continue in business.


The Directors are responsible for keeping adequate accountingrecords that are sufficient to show and explain the ParentCompany’s transactions and disclose with reasonable accuracyat any time the financial position of the Parent Company andenable them to ensure that its financial statements comply withthe provisions of the Companies Act 2006. The Directors havegeneral responsibility to take such steps as are reasonably opento them to safeguard the assets of the Group and to preventand detect fraud and other irregularities.

The Directors are responsible for the maintenance and integrityof the corporate and financial information included on theCompany’s website. Legislation in the UK governing thepreparation and dissemination of financial statements maydiffer in other jurisdictions.

Disclosure of audit informationThe Directors confirm that, as at the date of approval of thisannual report and these financial statements, so far as eachDirector is aware there is no relevant audit information of whichthe Company’s auditor is unaware and that he has taken all thesteps that he ought to have taken as a Director in order to makehimself aware of any relevant audit information and to establishthat the Company’s auditor is aware of that information.

Going concernThe Directors have in place procedures to review the forecastsand budgets for the coming year, which have been drawnup with appropriate regard for both the macroeconomicenvironment in which the Group operates and the particularcircumstances influencing the Domain Name industry and theGroup itself. These were prepared with reference to historic andcurrent industry knowledge, contracted trading activities, andprospects that relate to the future strategy of the Group. As aresult, at the time of approving the financial statements, theDirectors consider that the Company and the Group havesufficient resources to continue in operational existence for theforeseeable future and that it is appropriate to adopt the goingconcern basis in the preparation of the financial statements.

As with all forecasts, the Directors cannot guarantee that thegoing concern basis will remain appropriate given the inherentuncertainty relating to future events. Principle areas ofUncertainty and Risks are highlighted on page 14.

AuditorsThe Company’s independent external auditors, Crowe ClarkWhitehill LLP, were initially appointed on 17 July 2013 and thenreappointed at the Company’s Annual General Meeting of11 June 2014. It is proposed by the Board they be put forwardfor reappointment as auditors and a resolution concerning theirreappointment will be proposed at the forthcoming AGM.

Registered office35-39 Moorgate, London EC2R 6AR

Registered number: 08576358

Approved by the Board and signed on it’s behalf by:

John Swingewood Chairman28 April 2015


Cautionary statementUnder the Companies Act 2006, a Company’s Directors’ Report is required,among other matters, to contain a fair review by the Directors of the Group’sbusiness, through a balanced and comprehensive analysis of the developmentand performance of the business of the Group and the position of the Groupat the year end, consistent with the size and complexity of the business.

The Directors’ Report set out above, including the Chairman’s Statement, theChief Executive’s Report, and the Chief Financial Officer’s Report incorporatedinto it by reference (together with the Directors’ Report), has been prepared onlyfor the shareholders of the Company as a whole, and its sole purpose and useis to assist shareholders to exercise their governance rights. In particular, theDirectors’ Report has not been audited or otherwise independently verified. TheCompany and its Directors and employees are not responsible for any otherpurpose or use or to any other person in relation to the Directors’ Report.

The Directors’ Report contains indications of likely future developments andother forward-looking statements that are subject to risk factors associatedwith, among other things, the economic and business circumstancesoccurring from time to time in the countries, sectors and business segmentsin which the Group operates. These factors include, but are not limited to,those discussed under Principal Risks and Uncertainties. These and otherfactors could adversely affect the Group’s results, strategy and prospects.Forward-looking statements involve risks, uncertainties and assumptions.They relate to events and/or depend on circumstances in the future whichcould cause actual results and outcomes to differ materially from thosecurrently anticipated. No obligation is assumed to update any forward lookingstatements, whether as a result of new information, future events or otherwise.

Corporate governance

Board governance and policyThe Directors acknowledge the importance of the principles setout in the UK Corporate Governance Code. Although theCorporate Governance Code is not compulsory for AIM quotedcompanies, the Directors have applied the principles in the Codeas far as practicable and appropriate for a company of its sizeand nature, in accordance with the QCA Corporate GovernanceCode for small and mid-sized Quoted Companies 2013.

The Board comprises a Non-Executive Chairman, threeexecutive directors and three non-executive directors. The Boardmeets regularly to consider the business strategy, performanceand the framework of internal controls. To enable the Board todischarge its duties, all Directors receive appropriate and timelyinformation. Briefing papers are distributed to all Directors inadvance of Board meetings. All Directors have access to theadvice and services of the Company Secretary, who isresponsible for ensuring that the Board procedures are followedand that applicable rules and regulations are complied with.In addition, procedures are in place to enable the Directors toobtain independent professional advice in the furtherance oftheir duties, if necessary, at the Company’s expense.

In line with the requirements of the UK Corporate GovernanceCode and the Company’s Articles of Association, the Grouphas voluntarily chosen that two Directors will retire at theAnnual General Meeting and being eligible, will offerthemselves for re-election.

Board CommitteesThe Company has established Audit, Nomination andRemuneration Committees.

The terms of reference for the three committees were reviewedduring the year and are available for inspection on request fromthe Company Secretary.

Audit CommitteeThe Audit Committee has John Swingewood as Chairman andother members of the Committee include Samuel Dayani,Thomas Rickert and Thomas Pridmore. The Chief Financial Officeris invited to and regularly does attend the Committee meetings.

The primary responsibilities of the Committee, having due regardfor the interests of Shareholders include:

• Monitoring the integrity of the half yearly and annual financialstatements and formal announcements regarding theGroup’s financial performance

• Reviewing significant accounting policies, areas ofsignificant estimates and judgments and disclosures infinancial reports

• Monitoring the quality and effectiveness of internal controlprocedures and risk management systems

• Considering the requirement for Internal Audit, taking intoaccount the size and nature of the Company and the Group

• Reviewing the external auditor reports relating to theCompany’s accounting and internal control procedures

• Overseeing the Board’s relationship with the externalauditors, including their continued independence andmaking recommendations to the Board on the selectionof external auditors.

The Audit Committee is required to meet at least twice a year.During the year the Committee met on three occasions.

The appointment of the independent external auditor isapproved by the shareholders annually. The independentauditor’s audit of the financial statements is conducted inaccordance with International Standards on Auditing, ISA(UK and Ireland) issued by the Auditing Practices Board.

It is noted that the external auditor also operates proceduresdesigned to safeguard their objectivity and independence.

The Audit Committee reviews all fees related to non-audit work,and the committee reviews any material non-audit work priorto commencement. Details of auditor fees can be found innote 7 to the financial statements.

Remuneration CommitteeThe Group’s Remuneration Committee is responsible, on behalf ofthe Board, for developing remuneration policy. Details of objectivesand policy are provided in the Remuneration Report on page 27.

The Remuneration Committee has John Swingewood as itsChairman and other members of the Committee include SamuelDayani, Thomas Rickert and Thomas Pridmore.

The primary responsibilities of the Committee, having dueregard for the interests of Shareholders include:

• Determining and agreeing with the Board the remuneration policyfor the Chairman of the Board, the non-Executive Directors andthe Executive Directors and other senior managers

• Reviewing the design of share incentive plans for approvalby the Board and determining the award policy to ExecutiveDirectors and personnel under existing plans

• Determining the remainder of the remuneration packages(principally salaries, bonus and pension) for the ExecutiveDirectors and senior management including anyperformance-related targets

• Reviewing and noting remuneration trends across the Group

• Co-ordinating with the Nominations Committee in relation tothe remuneration to be offered to any new ExecutiveDirector; and

• Taking responsibility for the selection criteria and ifappropriate selecting, appointing and setting terms ofreference for any remuneration consultants engaged toadvise the Committee.


The Remuneration Committee was created in September 2013and is required to meet at least twice a year. During 2014 theCommittee met on three occasions.

It is the Group’s policy that Executive Directors’ service contractscontain at least a 6 month notice period.

Nominations CommitteeThe Group’s Nominations Committee has the power andauthority to carry out a selection process of candidates beforeproposing new appointments to the Board.

The Nominations Committee has John Swingewood as itsChairman and other members of the Committee include SamuelDayani, Thomas Rickert and Thomas Pridmore.

The Nominations Committee was created in September 2013and is required to meet at least once a year. During 2014 theCommittee met on one occasion.

The Group has adopted a policy for Directors and key employeeshare dealings which is appropriate for an AIM-quoted Group.The Directors comply with Rule 21 of the AIM rules relating toDirector’s dealings and take reasonable steps to ensurecompliance by the Group’s applicable employees.

The Executive and Non-Executive Directors service contractsare available for inspection by shareholders on request to theCompany Secretary.

The Chairman and Non-Executive Directors do not participatein agenda items at any meeting when discussions in respectof matters relating to their own position take place.

Risk management and internal controlsThe Board has primary responsibility for establishing andmaintaining the Group’s financial and non-financial controls,as well as identifying the major risks facing the Group.

Internal control systems are designed to meet the particularneeds of the Group and the risks to which it is exposed. By theirnature, internal controls can provide reasonable but not absoluteassurance against material misstatement or loss.

The Executive Directors and Senior Management have specificresponsibilities for aspects of the Group’s affairs and haveregular discussions to address operational matters, as well asconsidering the skillsets required in their teams to maintain theinternal controls required.

Accounting proceduresThe financial processes and control systems are kept underregular review by the Executives with oversight from the Board,with a view to further evolution and improvement as theGroup’s activities expand.

Accounting procedures are managed on a day to day basis bythe Finance team. Responsibility levels are set and agreed withthe Board, with authority delegated to appropriate responsiblemanagers as well as the Executive. Segregation of duties isdeployed to the degree this is practical and efficient, notingthe size of the Group.

Monthly management accounts are reported to the Board,under IFRS (EU) with the content aligned to the Group’smanagement information requirements. The Board reviews theaccounts in detail during each Board meeting and requestsfurther information as the need arises. Comparisons toapproved budgets and forecasts are prepared with associatedcommentary provided.

The Company prepares annual Budgets which are reviewed bythe Board. The Budgets are then updated during the year toprovide latest forecasts.

Capital expenditure is regulated by the Budget process, and iskept under regular review during the year. Investment appraisaltechniques, using discounted cashflow projections, aredeployed in relation to material investments and are reviewedby the Board as part of good governance such that materialtransactions that are significant in terms of their size or typeare only undertaken after Board review.

The Board acknowledges that there are processes in place foridentifying, evaluating and managing risks faced by the Group,and places emphasis on continuous process improvement.

Corporate responsibility, the environmentand health and safetyThe Group is committed to maintaining and promoting highstandards of business integrity. Company values, whichincorporate the principles of corporate social responsibility andsustainability, guide the Group’s relationships with clients,employees and the communities and environment in whichthe Group operates.

The Group’s approach to sustainability addresses both ourenvironmental and social impacts, supporting the Group’s visionto remain an employer of choice, while meeting client demandsfor socially responsible partners. By way of example the Groupcompanies have arranged and promoted a number of ACE(Athletics, Community and Environmental) activities in the pastand these are likely to continue; the Company is certified bythe Carbon Neutral Company.

The Group respects local laws and customs while supportinginternational laws and regulations. These policies have beenintegral in the way Group companies have done business in thepast and will continue to play a central role in influencing theGroup’s practice in the future.


Corporate governance continued

Communications with shareholdersThe Board regards the importance of effective communicationwith shareholders as essential.

Relations with shareholders are managed principally by the ChiefExecutive Officer and the Chairman, and meetings are regularlyheld with institutional investors and analysts during the year.

The Chairman, Chief Executive Officer, the Chief Financial Officerand if required Non-Executive Directors make themselvesavailable for meetings with major shareholders either individuallyor collectively. The Group’s shareholders are invited to attend theAGM at which the majority of Directors are present. The Group’sNominated Advisors and Joint Brokers also convey shareholderopinions to the Chairman and Chief Executive Officer and theseare discussed with the Board.

The Group’s website contains information on current businessactivities, including the annual and interim results.

Annual General Meeting dateThe Annual General meeting will be convened in accordancewith the provisions of the Companies Act 2006. The AnnualGeneral Meeting will take place on 28 May 2015 at 10.00amat the offices of the Company’s solicitors:

DWF LLP20 Fenchurch StreetLondonEC3M 3AG

The proposed resolutions together with proxy forms andthis annual report will be distributed to shareholders by the4 May 2015, if not before.


Remuneration report


As the Company is an AIM listed company, it is not required topresent a Directors’ Remuneration report. However, the Boardhas chosen to do so in line with evolving best practice.

Remuneration CommitteeThe membership of the Committee and the principal activitiesare detailed in the Corporate Governance section of the annualreport on pages 24 and 25.

Remuneration policyThe Company’s remuneration policy is focussed on being able toattract, retain and incentivise management with the appropriateskills and expertise to realise the Group’s strategic objectives andalign managements’ interests with those of shareholders.

In particular the Remuneration Committee seeks to link paymentto performance and as a result create a performance culturewithin the business.

The Directors believe that it is important to properly motivate andreward key senior employees and executives and to do so in amanner that aligns their interests with that of the Shareholders.The Directors also recognise the importance of ensuring that allemployees are well motivated and identify closely with theprofitability of the Company.

Directors remunerationThe average number of staff employed by the Group is includedin note 8 to the financial statements.

Disclosure of the remuneration for key management personnel,as required under IAS 24, is also detailed in note 8 to thefinancial statements.

In terms of the remuneration of the Company’s Directors, entriesto profit and loss included in the Statement of ComprehensiveIncome include:

Included in the Directors’ salaries and fees above is a charge of£54,000 in the year to the Company and Group by RobertPooke Consulting (2013: £51,335) of which Robert Pooke hasa controlling interest.

Included in the Directors’ salaries and fees above is a charge of£25,000 in the year to the Company and Group by LauraTrading LLC (2013: £48,333) of which Samuel Dayani has acontrolling interest.

Included in the Directors’ salaries and fees above is a charge of£40,150 in the year to the Company and Group by SwingewoodConsulting Ltd (2013: £13,333) of which John Swingewood hasa controlling interest. Consultancy fees of £nil were incurredduring 2014 (2013: £33,333).

Included in the Directors’ emoluments above is a charge of£206,333 in the year to the Company and Group by BenCrawford FZE (2013: £64,251) of which Ben Crawford has acontrolling interest. Consultancy fees of £nil were incurredduring 2014 (2013: £129,500).

Included in the Directors’ salaries and fees above is a chargeof £18,767 in the year to the Company and Group by WJPConsulting Ltd (2013: £nil) of which Tom Pridmore has acontrolling interest.

Included in the Directors’ emoluments above is a charge of£5,333 in the year to the Company and Group by Mataxis Ltd(2013: £18,879) of which Donald Baladasan has a controllinginterest. Consultancy fees of £16,500 have also been incurredduring 2014 (2013: £39,275).

Share-based Salaries & fees Bonus Pension payments 2014 2013 £’000 £’000 £’000 £’000 £’000 £’000

CentralNic LimitedNon-Executive DirectorsRobert Pooke – – – – – 33Samuel Dayani – – – – – 40

CentralNic Group PLC following IPONon-Executive DirectorsSamuel Dayani 25 – – – 25 8John Swingewood 40 – – – 40 13Thomas Rickert 25 – – 13 38 11Tom Pridmore 25 – – 13 38 12

Executive DirectorsRobert Pooke 60 – – – 60 20Ben Crawford 146 66 – 163 375 108Glenn Hayward 113 23 16 – 152 –Donald Baladasan 6 – – – 6 23

440 89 16 189 734 268

Remuneration report continued


In addition, the following fees were also paid to Directors forwork undertaken in relation to the placing of shares in 2013and included in the 2013 share issue costs:

Fees£’000

Samuel Dayani (Laura Trading LLC) 30Ben Crawford (Ben Crawford FZE) 79Donald Baladasan (Mataxis Ltd) 46John Swingewood (Swingewood Consulting Ltd) 8Robert Pooke (Robert Pooke Consulting) 8

171

Share optionsPrior to admission to AIM CentralNic established an unapprovedshare option scheme under which certain key executives andemployees were invited to participate.

In addition, again prior to AIM admission, CentralNic also grantedoptions under an Enterprise Management Incentive Scheme(EMI) under separate EMI option agreements to certain qualifyingkey executives and employees. These options were rolled overinto the Company during 2013.

To reflect existing commitments, the options granted in June2013 for the unapproved option scheme and the EMI schemewill vest in 12 equal instalments at 3 month intervals followingAdmission (so that the options will have fully vested 3 years afterthe date of the grant). The unapproved options granted on14th October 2013 will vest 3 years after the date of grant.

None of the Directors participate in the EMI scheme, but BenCrawford participates in both the June 2013 and October 2013unapproved scheme, and Donald Baladasan (a former Director)participates in the June 2013 unapproved scheme.

These share incentive arrangements are designed to supportthe strategy of generating significant sustainable value forshareholders by linking the rewards for executives with the valuecreated for Shareholders and thereby aligning the interests ofkey executives with those of Shareholders.

Shares acquired or options granted under any share incentivearrangements operated by the Company will be limited in total to 10per cent of the Company’s issued share capital from time to time.

The table below shows the outstanding share options issued toDirectors and former Directors at 31 December 2014, notingthat no options were granted during 2014:

None of the options have been exercised during the year and nooptions have expired. All options expire within 10 years of grant.

Further details are provided in relation to share based paymentsin note 26 to the financial statements.

In addition, a further 1,084,000 options over ordinary shares arein issue, being held by the Company’s employees.

The IFRS2 charge in the year for all share option plans relatingto the Directors was £189,518 (2013: £51,585).

On 31 December 2014, the closing market price of CentralNicGroup plc ordinary shares was 43 pence. The highest and lowestprice of these shares in the year were 98 pence on 1 January2014 and 36 pence on 24 November 2014 respectively.

Number of options Exercise price Options granted

Outstanding at 1 January and 31 December 2014Ben Crawford 1,316,000 10p 1 June 2013Donald Baladasan (former Director) 125,000 10p 1 June 2013Ben Crawford 850,000 55p 14 October 2013Thomas Rickert 88,000 55p 14 October 2013Tom Pridmore 88,000 55p 14 October 2013

Total 2,467,000


Directors’ interests(a) As at 31 December 2014, the interests of the Directors,including persons connected with the Directors within themeaning of section 252 of the Companies Act 2006, in theissued share capital of the Company are as follows:

Ordinary Shares Percentage

Erin Invest & Finance Ltd* 21,630,382 35.35%

UBS Private BankingNominees Ltd (R Pooke)** 8,400,581 13.73%

Jabella Group Ltd*** 5,687,891 9.30%

Natwest FIS Nominees**** 3,699,000 6.05%

* The beneficial holder of Erin and Natwest FIS Nominee Limited is the fatherof Samuel Dayani, a Director of the Company. Of these shares 5,687,891Ordinary Shares are held by Jabella Group Limited in which Erin has a53.80 per cent. interest

** 5,687,891 Ordinary Shares are held by Jabella Group Limited in whichRobert Pooke has a 32.0 per cent. interest

*** Jabella Group Limited is a BVI company owned inter alia, by Erin, NatwestFIS Nominee Limited, John Swingewood and Robert Pooke.

**** 5,687,891 Ordinary Shares are held by Jabella Group Limited in whichNatwest FIS Nominee Limited has a 8.40 per cent interest

There are no changes to this information as at the date ofthis report.

(b) Save as disclosed in this annual report, none of the Directorsnor any members of their families, nor any person connected withthem within the meaning of section 252 of the Act, has any interestin the issued share capital of the Company or its subsidiaries.

(c) Save as disclosed in this annual report, as at the date of thisDocument, no Director has any option over any warrant tosubscribe for any shares in the Company.

(d) None of the Directors nor any members of their families, norany person connected with them within the meaning of section252 of the Act, has a related financial product (as defined in theAIM Rules) referenced to the Ordinary Shares.

(e) None of the Directors is or has been interested in anytransaction which is or was unusual in its nature or conditionsor significant to the business of the Company and which waseffected by the Company and remains in any respectoutstanding or unperformed.

(f) There are no outstanding loans made or guaranteesgranted or provided by the Company to or for the benefit ofany Director other than disclosed in notes 15 and 24 to thefinancial statements.

(g) Save as disclosed in this Annual report, there are no potentialconflicts of interest between any duties to the Company of theDirectors and their private interests or their other duties.

We have audited the financial statements of CentralNic Groupplc for the year ended 31 December 2014 which comprise theGroup Statement of Financial Position and Parent CompanyBalance Sheet, the Group Statement of ComprehensiveIncome, the Group Cash Flow Statement, the Group Statementof Changes in Equity and the Parent Company Reconciliation ofMovements in Shareholders’ Funds and the related notes setout on pages 31 to 64.

The financial reporting framework that has been applied in thepreparation of the Group financial statements is applicable lawand International Financial Reporting Standards (IFRSs) asadopted by the European Union. The financial reportingframework that has been applied in the preparation of the ParentCompany financial statements is applicable law and UnitedKingdom Accounting Standards (United Kingdom GenerallyAccepted Accounting Practice).

This report is made solely to the Company’s members, as abody, in accordance with Chapter 3 of Part 16 of theCompanies Act 2006. Our audit work has been undertaken sothat we might state to the Company’s members those matterswe are required to state to them in an auditor’s report and for noother purpose. To the fullest extent permitted by law, we do notaccept or assume responsibility to anyone other than theCompany and the Company’s members as a body, for our auditwork, for this report, or for the opinions we have formed.

Respective responsibilities of Directors and auditorsAs explained more fully in the Statement of Directors’Responsibilities, the Directors are responsible for the preparationof the financial statements and for being satisfied that they give atrue and fair view. Our responsibility is to audit and express anopinion on the financial statements in accordance with applicablelaw and International Standards on Auditing (UK and Ireland).Those standards require us to comply with the Auditing PracticesBoard’s Ethical Standards for Auditors.

Scope of the audit of the financial statementsAn audit involves obtaining evidence about the amounts anddisclosures in the financial statements sufficient to give reasonableassurance that the financial statements are free from materialmisstatement, whether caused by fraud or error. This includes anassessment of: whether the accounting policies are appropriateto the Company’s circumstances and have been consistentlyapplied and adequately disclosed; the reasonableness ofsignificant accounting estimates made by the Directors; andthe overall presentation of the financial statements.

In addition, we read all the financial and non-financial informationin the Strategic Report and the Directors’ Report to identifymaterial inconsistencies with the audited financial statementsand to identify any information that is apparently materiallyincorrect based on, or materially inconsistent with, theknowledge acquired by us in the course of performing the audit.If we become aware of any apparent material misstatements orinconsistencies we consider the implications for our report.

Opinion on financial statementsIn our opinion:

• the financial statements give a true and fair view of the stateof the Group’s and of the Parent Company’s affairs as at31 December 2014 and of the Group’s profit and the ParentCompany’s loss for the year then ended;

• the Group financial statements have been properly preparedin accordance with IFRSs as adopted by the European Union;

• the Parent Company financial statements have been properlyprepared in accordance with United Kingdom GenerallyAccepted Accounting Practice; and

• the financial statements have been prepared in accordancewith the requirements of the Companies Act 2006.

Opinion on other matter prescribed by theCompanies Act 2006In our opinion the information given in the Strategic Reportand the Directors’ Report for the financial year for which thefinancial statements are prepared is consistent with thefinancial statements.

Matters on which we are required to report by exceptionWe have nothing to report in respect of the following matterswhere the Companies Act 2006 requires us to report to you if,in our opinion:

• adequate accounting records have not been kept by theParent Company, or returns adequate for our audit have notbeen received from branches not visited by us; or

• the Parent Company financial statements are not inagreement with the accounting records and returns; or

• certain disclosures of Directors’ remuneration specified bylaw are not made; or

• we have not received all the information and explanationswe require for our audit

Stephen BullockSenior Statutory Auditor

For and on behalf ofCrowe Clark Whitehill LLPStatutory Auditor

St Bride’s House10 Salisbury SquareLondonEC4Y 8EH

28 April 2015

Independent Auditors’ reportto the Members of Centralnic Group plc



Consolidated statement ofcomprehensive incomefor the year ended 31 December 2014

2014 2013 Note £’000 £’000

Revenue 5,6 6,067 3,051Cost of sales (2,494) (713)

Gross profit 3,573 2,338Administrative expenses (2,854) (1,578)Share based payments expense (222) (66)

Operating profit 497 694

Adjusted EBITDA* 1,724 1,015Depreciation 13 (90) (16)Amortisation of intangible assets 14 (448) (239)Acquisition deal fees (467) –Share based payments expense (222) (66)

Operating profit 497 694

Finance income 10 23 7

Profit before taxation 7 520 701Income tax expense 11 (156) (171)

Profit after taxation attributable to equity shareholders 364 530

Other comprehensive incomeOther comprehensive income – 1

Total comprehensive income for the financial year attributable to equity shareholders 364 531

2014 2013 Note Pence pence

Earnings per shareBasic 12 0.60 1.00Diluted 12 0.56 0.91

* Earnings before interest, tax, depreciation and amortisation, non-trading items and non-cash charges.

All amounts relate to continuing activities.

The notes on pages 35 to 57 form an integral part of these financial statements.


Consolidated statementof financial positionas at 31 December 2014

2014 2013 Note £’000 £’000

ASSETSNon-current assetsProperty, plant and equipment 13 90 54Intangible assets 14 6,118 1,941Deferred receivables 15 916 694Investments 16 997 2Deferred tax assets 21 74 –

8,195 2,691Current assetsTrade and other receivables 17 2,333 316Cash and bank balances 18 3,056 4,932

5,389 5,248

Total assets 13,584 7,939

EQUITY AND LIABILITIESEquityShare capital 19 61 59Share premium 19 4,935 3,485Share based payments reserve 1,018 742Foreign exchange translation reserve 1 1Retained Earnings 885 521

Total equity 6,900 4,808

Non-current liabilitiesOther payables 20 725 457Deferred tax liabilities 21 72 62

797 519

Current liabilitiesTrade and other payables and accruals 22 5,671 2,427Taxation payable 216 185

5,887 2,612Total liabilities 6,684 3,131

Total equity and liabilities 13,584 7,939

These financial statements were approved and authorised for issue by the Board of Directors on 28 April 2015 and were signedon it’s behalf by:


Company Number: 08576358



Consolidated statementof changes in equityfor the year ended 31 December 2014

Foreign Share based exchange Share Share payments translation Retained capital premium reserve reserve earnings Total £’000 £’000 £’000 £’000 £’000 £’000

Balance as at 31 December 2012 50 – – – 629 679Profit for the year – – – – 530 530Other comprehensive income for the year –translation of foreign operation – – – 1 – 1

Total comprehensive income for the year – – – 1 530 531Dividends – – – – (638) (638)

Issue of new shares 9 4,991 – – – 5,000Share issue costs – (1,506) – – – (1,506)Share based payments – – 742 – – 742

Balance as at 31 December 2013 59 3,485 742 1 521 4,808Profit for the year – – – – 364 364Other comprehensive income for the year –translation of foreign operation – – – – – –

Total comprehensive income for the year – – – – 364 364Issue of new shares 2 1,472 – – – 1,474Share issue costs – (22) – – – (22)Share based payments – – 222 – – 222Share based payments – deferred tax asset – – 54 – – 54

Balance as at 31 December 2014 61 4,935 1,018 1 885 6,900

Share capital represents the nominal value of the Company’s cumulative issued share capital. Share premium represents thecumulative excess of the fair value of consideration received for the issue of shares in excess of their nominal value less attributableshare issue costs and other permitted reductions. Retained profits represent the cumulative value of the profits not distributed toshareholders, but retained to finance the future capital requirements of the CentralNic Group. Share based payments reserverepresents the cumulative value of share based payments recognised through equity. Foreign currency translation reserverepresents the cumulative exchange differences arising on Group consolidation.



Consolidated statementof cash flowsfor the year ended 31 December 2014

2014 2013 £’000 £’000

Cash flow from operating activitiesProfit before taxation 520 701

Adjustments for:Depreciation of property, plant and equipment 90 16Amortisation of intangible assets 448 239Share based payments 222 66

Operating profit before working capital changes 1,280 1,022Increase in trade and other receivables (664) (138)Increase in trade and other payables and accruals 934 375

Cash flow from operations 1,550 1,259Income tax paid (136) (125)

Net cash flow from operating activities 1,414 1,134

Cash flow used in investing activitiesPurchase of property, plant and equipment (126) (50)Purchase of intangible assets (1,838) (216)Disposal of intangible assets – –Loan repayments (paid to)/received from third parties (102) 283Purchase of investments (997) –

Net cash flow used in investing activities (3,063) 17

Cash flow used in financing activitiesProceeds from issuance of ordinary shares – 4,169Repayments of borrowings – 319Dividends paid – (638)Reduction in deferred consideration (230) (223)

Net cash flow generated from/(used in) financing activities (230) 3,627

Net increase in cash and cash equivalents (1,879) 4,778Cash and cash equivalents at beginning of the year 4,932 160Exchange losses on cash and cash equivalents 3 (6)

Cash and cash equivalents at end of the year 3,056 4,932



Notes to the consolidatedfinancial statementsfor the year ended 31 December 2014

1. General information(a) Nature of operationsCentralNic Group Plc is the UK holding company of a group of companies which are engaged in the provision of independentglobal domain name registry services. The Company was incorporated on 19 June 2013 to become the holding company of theGroup following a reorganisation which took place on 9 August 2013. The Company is registered in England and Wales. Itsregistered office and principal place of business is 35-39 Moorgate, London, EC2R 6AR.

The CentralNic Group provides registry, registrar and enterprise services and strategic consultancy for new Top Level Domains(“TLDs”), Country Code TLD’s (“ccTLDs”) and Second-Level Domains (“SLDs”) and it is the owner and registrant for a portfolio ofdomain names, which it uses as SLD domain extensions and for resale on the domain aftermarket.

(b) Component undertakingsThe principal activities of the subsidiaries and other entities included in the financial statements are as follows:

Place ofincorporation/ Issued and paid-up/

Name establishment Principal activities registered capital Effective interests

CentralNic Limited England and Wales Domain registry services provider Ordinary shares 100%

CentralNic USA Limited USA US sales office Ordinary stock 100%

GB.com Limited England and Wales Dormant – holds domain name Ordinary shares 100%

Who Is Privacy Limited England and Wales Dormant Ordinary shares 100%

TLD Registrar Solutions Limited England and Wales Domain registrar services provider Ordinary shares 100%

Internet Domain Service Commonwealth of Domain registrar services provider Ordinary shares 100%BS Corp The Bahamas

Whois Privacy Corp Commonwealth of Domain registrar services provider Ordinary shares 100%The Bahamas

Hoxton Domains Limited England and Wales Aftermarket domain services Ordinary shares 100%

2. Application of IFRS(a) Basis of preparationThe Company was incorporated on 19 June 2013 and on 9 August 2013 acquired the entire share capital of CentralNic Limited.As a result of this transaction, the ultimate shareholders in CentralNic Limited received shares in the Company in direct proportionto their original shareholdings in CentralNic Limited.

Under IFRS 3 (revised) “Business Combinations”, the acquisition of CentralNic Limited by the Company has been accounted for asa reverse acquisition and the consolidated IFRS financial statements of the Company is therefore a continuation of the financialstatements of CentralNic Limited.

As a result any financial statements after 9 August 2013 represent consolidated financial statements of the Group. Prior to this date,the historical financial statements represent the financial statements of the Company’s subsidiary, CentralNic Limited (see Note 3 of theCompany financial statements), and CentralNic Limited’s subsidiary undertakings. On this basis, the comparative information is pro-forma.

The financial statements are measured and presented in sterling (£), unless otherwise stated, which is the currency of the primaryeconomic environment in which the entities operate. They have been prepared under the historical cost convention, except forfinancial instruments that have been measured at fair value through profit and loss.

The financial statements have been prepared on the going concern basis, which assumes that the Group will continue to be ableto meet its liabilities as they fall due for the foreseeable future. The financial statements have been prepared in accordance withInternational Financial Reporting Standards as adopted by the EU (“IFRS”) issued by the International Accounting Standards Board(“IASB”), including related interpretations issued by the International Financial Reporting Interpretations Committee (“IFRIC”).

The Director’s have reviewed forecasts and budgets for the coming year having regard to both the macroeconomic environment inwhich the Group operates, historic and current industry knowledge and contracted trading activities and the future strategy of theGroup. As a result of that review the Director’s consider that it is appropriate to adopt the going concern basis of preparation.


2. Application of IFRS continued(b) Standards, amendments and interpretations to published standards not yet effectiveThe Directors have considered those Standards and Interpretations, which have not been applied in the Financial Statements butare relevant to the Group’s operations, that are in issue but not yet effective and do not consider that any will have a materialimpact on the future results of the Group.

3. Summary of significant accounting policiesThe financial statements have been prepared on the historical cost basis, as explained in the accounting policies set out below,which has been prepared in accordance with IFRS. The principal accounting policies are set out below.

(a) Basis of consolidationThe consolidated financial statements include the financial statements of all subsidiaries. The financial year ends of all entities in theGroup are coterminous.

The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control overthe operating and financial decisions is obtained and cease to be consolidated from the date on which control is transferred out ofthe Group. Control exists when the Company has the power, directly, or indirectly, to govern the financial and operating policies ofan entity so as to obtain economic benefits from its activities.

On 9 August 2013, the Group, previously headed by CentralNic Limited underwent a re-organisation under which CentralNicLimited’s shareholders in their entirety exchanged their shares for shares in CentralNic Group Plc a newly formed company, whichthen became the ultimate Parent Company of the Group.

Notwithstanding the change in the legal parent of the Group, this transaction has been accounted for as a reverse acquisitionunder IFRS 3 (revised) “Business Combinations” and the consolidated financial statements are prepared on the basis of the newlegal parent having been acquired by the existing Group.

All intercompany balances and transactions, including recognised gains arising from inter-group transactions, have been eliminated in full.Unrealised losses are eliminated in the same manner as recognised gains except to the extent that they provide evidence of impairment.

(b) Business combinationsBusiness combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregateof the consideration transferred measured at acquisition date fair value and the amount of any non-controlling interests in theacquiree. For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree atfair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are expensed as incurredand included in administrative expenses.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification anddesignation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date.This includes the separation of embedded derivatives in host contracts by the acquiree.

If the business combination is achieved in stages, any previously held equity interest is remeasured at its acquisition date fair valueand any resulting gain or loss is recognised in profit or loss.

Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Contingentconsideration classified as an asset or liability that is a financial instrument and within the scope of IAS 39 Financial Instruments: Recognitionand Measurement, is measured at fair value with changes in fair value recognised in either profit or loss or as a change to Othercomprehensive income. If the contingent consideration is not within the scope of IAS 39, it is measured in accordance with the appropriateIFRS. Contingent consideration that is classified as equity is not remeasured and subsequent settlement is accounted for within equity.

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognisedfor non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fairvalue of the net assets acquired is in excess of the aggregate consideration transferred, the Group re-assesses whether it hascorrectly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure theamounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquiredover the aggregate consideration transferred, then the gain is recognised in profit or loss.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing,goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that areexpected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

Notes to the consolidatedfinancial statements continued


3. Summary of significant accounting policies continuedWhere goodwill has been allocated to a cash-generating unit and part of the operation within that unit is disposed of, the goodwillassociated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss ondisposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and theportion of the cash-generating unit retained.

(c) Functional and foreign currencies(i) Functional and presentation currencyThe financial statements are presented in £ rounded to the nearest thousand, which is CentralNic’s functional and presentation currency.

The individual financial statements of CentralNic Group entities are presented in the currency of the primary economic environmentin which the entity operates, which is either £ or US$.

(ii) Transactions and balancesTransactions in foreign currencies are converted into the respective functional currencies on initial recognition, using the exchangerates approximating those ruling at the transaction dates. Monetary assets and liabilities at the end of the reporting period aretranslated at the rates ruling as of that date. Non-monetary assets and liabilities are translated using exchange rates that existedwhen the values were determined. All exchange differences are recognised in profit or loss.

(d) Financial instrumentsFinancial assets and liabilities are recognised in the statements of financial position when CentralNic or one of the CentralNicGroup entities has become a party to the contractual provisions of the instruments.

The CentralNic Group’s financial assets and liabilities are initially measured at fair value plus any directly attributable transactioncosts. The carrying value of the CentralNic Group’s financial assets, primarily cash and bank balances, and liabilities, primarilyCentralNic’s payables and other accrued expenses, approximate their fair values.

Financial instruments are offset when the CentralNic Group has a legally enforceable right to offset and intends to settle either on anet basis or to realise the asset and settle the liability simultaneously.

Financial instruments recognised in the pro forma aggregated statements of financial position are disclosed in the individual policystatement associated with each item.

(i) Financial assetsOn initial recognition, financial assets are classified as either financial assets at fair value through profit or loss, held-to-maturityinvestments, loans and receivables financial assets, or available-for-sale financial assets, as appropriate.

Trade and other receivables, deposits, and prepaymentsTrade and other receivables (including prepayments) that have fixed or determinable payments that are not quoted in an activemarket are classified as other receivables, deposits, and prepayments. Other receivables, deposits, and prepayments aremeasured at amortised cost using the effective interest method, less any impairment loss. Interest income is recognised byapplying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

Cash and bank balancesCash and bank balances comprise cash balances that are subject to insignificant risk of changes in their fair value, and are usedby the CentralNic Group in the management of its short-term commitments.

(ii) Financial liabilities and equity instrumentsFinancial liabilities are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest,dividends, gains and losses relating to financial liabilities are reported in profit or loss. Distributions to holders of financial liabilitiesare classified as equity and charged directly to equity.

Financial liabilitiesFinancial liabilities comprise long-term borrowings, short-term borrowings, trade and other payables and accruals, measured atamortised cost using the effective interest method.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest income overthe relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees onpoints paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts)through the expected life of the financial liability, or, where appropriate, a shorter period to the net carrying amount on initial recognition.



3. Summary of significant accounting policies continuedEquity instrumentsAn equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all its liabilities.Equity instruments issued by the CentralNic Group are recognised at the proceeds received, net of direct issue costs.

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options areshown in equity as a deduction, net of tax, from proceeds.

Dividends on ordinary shares are recognised as liabilities when approved for appropriation.

(e) Property, plant, and equipmentProperty, plant and equipment, including leasehold improvements and office furniture and equipment, are stated at cost lessaccumulated depreciation and impairment losses, if any.

Depreciation is calculated under the reducing balance method to write off the depreciable amount of the assets over theirestimated useful lives. Depreciation of an asset does not cease when the asset becomes idle or is retired from active use unlessthe asset is fully depreciated. The principal annual rates used for this purpose are:

• Computer equipment 60% – 65%• Furniture and fittings 15% – 20%

The depreciation method, useful lives and residual values are reviewed, and adjusted if appropriate, at the end of each reportingperiod to ensure that the amounts, method and periods of depreciation are consistent with previous estimates and the expectedpattern of consumption of the future economic benefits embodied in the asset.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when thecost is incurred and it is probable that the future economic benefits associated with the asset will flow to the CentralNic Group andthe cost of the asset can be measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of theday-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred. Cost also comprises the initialestimate of dismantling and removing the asset and restoring the site on which it is located for which the CentralNic Group areobligated to incur when the asset is acquired, if applicable.

An item of property and equipment is derecognised upon disposal or when no future economic benefits are expected from its use.Any gain or loss arising from de-recognition of the asset is recognised in profit or loss. The revaluation reserve included in equityis transferred directly to retained profits on retirement or disposal of the asset.

(f) Intangible assetsIntangible assets represent amounts paid to acquire the rights to own and act as registrant for a portfolio of domain names oramounts in respect of such intangible assets originally included at Directors valuation but treated as deemed cost on transition toIFRS which, for the purposes of these financial statements, was 1 January 2010.

Capitalised domain names have a finite useful life and are measured at cost less accumulated amortisation and impairment losses,if any. Domain names are amortised on an annual basis at the rate of 10% to 20% reducing balance.

Development costs that the CentralNic Group incurs for identifiable and unique software will be capitalised, where the followingcriteria are met:

• it is technically feasible to complete the software so that it will be available for use;• management intends to complete the software product and use or sell it;• there is an ability to use or sell the software product;• it can be demonstrated that the asset will probably generate future economic benefits; and• the expenditure attributable to the software product during its development can be reliably measured.

Directly attributable costs that are capitalised as part of the software product include the employee costs and an appropriateportion of the relevant overheads.

Computer software development recognised as assets are amortised over their estimated useful lives, which are determined bythe Directors.

Costs for development initiatives that the CentralNic Group undertakes that are not otherwise allocable to specific domain namesor projects are charged to expense through profit and loss when incurred.


3. Summary of significant accounting policies continuedInternally generated intangibles, excluding capitalised development costs, are not capitalised and the related expenditure isreflected in profit or loss in the period in which the expenditure is incurred. The useful lives of intangible assets are assessed aseither finite or indefinite.

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in abusiness combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at costless any accumulated amortisation and accumulated impairment losses.

Intangible assets are tested for impairment annually if facts and circumstances indicate that impairment may exist. In the event thatthe expected future economic benefits of the intangible assets are no longer probable or expected to be recovered, the capitalisedamounts are written down to their recoverable amount through profit and loss.

(g) Impairment(i) Impairment of financial assetsFinancial assets not categorised at fair value through profit or loss are assessed at the end of each reporting period to determinewhether there is any objective evidence of impairment. A financial asset is impaired if there is objective evidence of impairment as aresult of one or more events that occurred after the initial recognition of the asset and that loss event(s) had an impact on the estimatedfuture cash flows of the asset. Objective evidence that financial assets are impaired includes default or delinquency by a debtor and therestructuring of an amount due to the CentralNic Group on terms that the CentralNic Group would not consider otherwise.

An impairment loss in respect of a financial asset measured at amortised cost, including other receivables, deposits, andprepayments, is recognised in profit or loss and is measured as the difference between the asset’s carrying amount and thepresent value of estimated future cash flows, discounted at the financial asset’s original effective interest rate. Losses arerecognised in profit or loss and reflected in an allowance account against the amounts receivable.

When the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after theimpairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that thecarrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would havebeen had the impairment not been recognised.

(ii) Impairment of non-financial assetsThe carrying values of non-financial assets, other than deferred tax assets, are reviewed at the end of each reporting period todetermine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount isestimated. The recoverable amount of the assets is the higher of the assets’ fair value less cost to sell and their value-in-use,which is measured by reference to discounted future cash flows.

An impairment loss is recognised if the carrying value of the asset exceeds its recoverable amount.

An impairment loss is recognised in profit or loss immediately.

In respect of assets other than goodwill, a subsequent increase in the recoverable amount of an asset is treated as a reversal of theprevious impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net ofamortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in profit or loss immediately.

(h) TaxationTaxation for the year comprises of current and deferred tax.

Current tax is the expected amount of income taxes payable in respect of the taxable profit for the year and is measured using thetax rates that have been enacted or substantively enacted at the end of the reporting period.

Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets andliabilities and their carrying amounts in the financial statements.

Deferred tax liabilities are recognised for all taxable temporary differences other than those that arise from goodwill or excess of theacquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over the businesscombination costs or from the initial recognition of an asset or liability in a transaction which is not a business combination and atthe time of the transaction, affects neither accounting profit nor taxable profit.



3. Summary of significant accounting policies continuedDeferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extentthat it is probable that future taxable profits will be available against which the deductible temporary differences, unused tax lossesand unused tax credits can be utilised. The carrying amounts of deferred tax assets are reviewed at the end of each reportingperiod and reduced to the extent that it is no longer probable that sufficient future taxable profits will be available to allow all or partof the deferred tax assets to be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realisedor the liability is settled, based on the tax rates that have been enacted or substantively enacted at the end of the reporting period.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current taxliabilities and when the deferred income taxes relate to the same taxation authority.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items arerecognised in correlation to the underlying transactions either in other comprehensive income or directly in equity and deferred taxarising from a business combination is included in the resulting goodwill or excess of the acquirer’s interest in the net fair value ofthe acquiree’s identifiable assets, liabilities and contingent liabilities over the business combination costs.

(i) Cash and cash equivalentsCash and bank balances comprise of cash in hand, bank balances, deposits with financial institutions and short-term, highly liquidinvestments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

(j) Employee benefitsShort-term employee benefits, including wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefitsare accrued in the period in which the associated services are rendered by employees of the CentralNic Group.

(k) Share based paymentsEmployees (including Directors and Senior Executives) of the Group receive remuneration in the form of share-based paymenttransactions, whereby these individuals render services as consideration for equity instruments (“equity-settled transactions”).These individuals are granted share option rights approved by the Board which can only be settled in shares of the respectivecompanies that award the equity-settled transactions. Share options rights are also granted to these individuals by majorityshareholders over their shares held. No cash settled awards have been made or are planned.

The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which theperformance and/or service conditions are fulfilled, ending on the date on which the relevant individuals become fully entitled to theaward (“vesting point”). The cumulative expense recognised for equity-settled transactions at each reporting date until the vestingdate reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instrumentsand value that will ultimately vest. The statement of comprehensive income charge for the year represents the movement in thecumulative expense recognised as at the beginning and end of that period.

The fair value of share-based remuneration is determined at the date of grant and recognised as an expense in the statement ofcomprehensive income on a straight line basis over the vesting period, taking account of the estimated number of shares that willvest. The fair value is determined by use of Black Scholes model method.

(l) Provisions, contingent liabilities and contingent assetsProvisions are recognised if, as a result of a past event, the CentralNic Group has a present legal or constructive obligation, whenit is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and when areliable estimate of the amount can be made. Provisions are reviewed at the end of each financial reporting period and adjusted toreflect the current best estimate. Where effect of the time value of money is material, the provision is the present value of theestimated expenditure required to settle the obligation.

A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by theoccurrence of one or more uncertain future events not wholly within the control of the CentralNic Group. It can also be a presentobligation arising from past events that is not recognised because it is not probable that outflow of economic resources will berequired or the amount of obligation cannot be measured reliably.

A contingent liability is not recognised in the financial statements but is disclosed in the notes to the financial statements. When achange in the probability of a contingent outflow occurs so that the outflow is probable, a liability will be recognised as a provision.


3. Summary of significant accounting policies continuedA contingent asset is a probable asset that arises from past events and whose existence will be confirmed only by the occurrence ornon-occurrence of one or more uncertain events not wholly within the control of the CentralNic Group. The CentralNic Group does notrecognise contingent assets but discloses their existence where inflows of economic benefits are probable, but not virtually certain.

(m) Related partiesA party is considered to be related to the CentralNic Group if, the party:

i. directly, or indirectly through one or more intermediaries:• controls, is controlled by, or is under common control with, the CentralNic Group (this includes parents, subsidiaries andfellow subsidiaries);

• has an interest in the CentralNic Group that gives it significant influence over the entity; or• has joint control over the CentralNic Group.

ii. is an associate of the CentralNic Group;

iii. is a joint venture in which the CentralNic Group is a venturer;

iv. is a member of the key management personnel of the CentralNic Group;

v. is a close member of the family of any individual referred to in (i) or (iv);

vi. is an entity that is controlled, jointly controlled or significantly influenced by, or for which significant voting power in such entityresides with, directly or indirectly, any individual referred to in (iv) or (v); or

vii. is a post-employment benefit plan for the benefit of employees of the CentralNic Group, or of any entity that is a related partyof the entity.

Close members of the family of an individual are those family members who may be expected to influence, or be influenced by,that individual in their dealings with the entity.

(n) Revenue recognitionRevenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for servicesprovided in the course of ordinary activities, net of discounts and sales related taxes.

Revenue from the sale of services is recognised when the amounts of revenue and cost can be measured reliably. In particular:

(i) Sale of registry services for domain names (“Registry Domain sales”)Revenue from the provision of registry and similar services under contracts for the sale of domain names by registrars and re-sellersreflect the period over which the underlying sales contract has been entered into by the registrar or re-seller, which can be for periods ofbetween one and ten years. Revenues attributable to future periods are deferred to future periods and included in ‘Deferred revenues’.

(ii) Sale of registrar services for domain names (“Registrar Domain sales”)Revenue from the provision of registrar and similar services under contracts for the sale of domain names by registrants andre-sellers reflect the period over which the underlying sales contract has been entered into by the registrant or re-seller, which canbe for periods of between one and ten years. Revenues attributable to future periods are deferred to future periods and included in‘Deferred revenues’. These revenues are matched to deferred wholesale costs which cover the same period of the underlying sale.

(iii) Sale of enterprise services including premium domain names (“Enterprise including Premium Domain Name Sales”)Revenue from enterprise services and premium domain name sales are recognised in profit and loss at the point of sale. Revenuefrom the provision of computer software to a customer is recognised when the Group has delivered the related software andcompleted all of the adaptions required by the customer for either the whole contract or for a specific milestone deliverable withinthe contract. Where no adaptions are required revenue is recognised on delivery.

(iv) Sale of consultancy and other services (“Consultancy”)Revenue from strategic consultancy and similar services is recognised in profit and loss in proportion to the stage of completion ofthe assignment at the reporting date. The stage of completion is determined based on completion of work performed.

(o) LeasesAssets held under leases are classified as operating leases and are not recognised in the CentralNic Group’s statement of financialposition. Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease.Lease incentives received are recognised as part of the total lease expense, over the term of the lease.



4. Critical accounting judgments and key sources ofestimating uncertaintyIn the application of the CentralNic Group’s accounting policies, which are described in note 3, the Directors are required to makejudgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not apparent from othersources. The estimates and assumptions are based on historical experience and other factors, including expectations of futureevents that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are recognisedin the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periodsif the revision affects both current and future periods.

The following are the key assumptions concerning the future and other key sources of estimation uncertainty at the statement offinancial position date that have a significant risk of causing a significant adjustment to the carrying amounts of assets and liabilitiesin the Financial statements:

Impairment testingThe recoverable amounts of individual non-financial assets are determined based on the higher of the value-in-use calculationsand the recoverable amount, or fair value less costs to sell. These calculations will require the use of estimates and assumptions.It is reasonably possible that assumptions may change, which may impact the Directors’ estimates and may then require a materialadjustment to the carrying value of tangible and intangible assets.

The Directors review and test the carrying value of tangible and intangible assets when events or changes in circumstancessuggest that the carrying amount may not be recoverable. For the purposes of performing impairment tests, assets are groupedat the lowest level for which identifiable cash flows are largely dependent of cash flows of other assets or liabilities. If there areindications that impairment may have occurred, estimates will be prepared of expected future cash flows for each group of assets.

Expected future cash flows used to determine the value in use of tangible and intangible assets will be inherently uncertain and couldmaterially change over time. The carrying value of the Group’s tangible and intangible assets are disclosed in notes 13 and 14 respectively.

Estimation of useful lifeThe charge in respect of periodic amortisation and depreciation is derived after determining an estimate of an asset’s expecteduseful life. The useful lives of the assets are determined by management at the time the asset is acquired and are reviewedcontinually for appropriateness.

Valuation of intangible assets acquiredThe customer list and software assets were acquired through the business combination outlined in note 23. The customer list isamortised over ten years and the software over five years. The determination of the fair value of assets and liabilities including goodwillarising on the acquisition of businesses, the acquisition of software technology and customer relationships, whether arising from separatepurchases or from the acquisition as part of business combinations, and development expenditure which is expected to generate futureeconomic benefits, are based, to a considerable extent, on management’s judgement. The fair value of these assets is determined bydiscounting estimated future net cash flows generated by the asset where no active market for the assets exists. The use of differentassumptions for the expectations of future cash flows and the discount rate would change the valuation of the intangible assets.

Allocation of the purchase price affects the results of the Group as finite lived intangible assets are amortised, whereas indefinite livedintangible assets, including goodwill, are not amortised and could result in differing amortisation charges based on the allocation to indefinitelived and finite lived intangible assets. The useful life used to amortise intangible assets relates to the expected future performance of theassets acquired and management’s estimate of the period over which economic benefit will be derived from the asset.

The estimated useful life principally reflects management’s view of the average economic life of each asset and is assessed by referenceto historical data and future expectations. Any reduction in the estimated useful life would lead to an increase in the amortisation charge.

Goodwill also arose through the business combination outlined in note 23. The Group tests goodwill recognised through businesscombinations annually for impairment using the method outlined above.


5. Segment analysisCentralNic is an independent global domain name service provider. It provides registry, registrar and enterprise services and it isthe owner and registrant of a portfolio of domain names, which it uses as SLD domain extensions. Management reviews theactivities of the CentralNic Group in the segments disclosed below.

2013

Adjusted Non-current Non-current Current Revenue EBITDA assets Current assets liabilities liabilities £’000 £’000 £’000 £’000 £’000 £’000

Registry Domain Sales 2,587 1,079 2,691 5,245 519 2,604Registrar Domain Sales – (63) – 3 – 8Enterprise including PremiumDomain Name Sales 66 66 – – – –Consultancy and other services 398 410 – – – –Group overheads includingcosts associated with publiccompany status – (477) – – – –

3,051 1,015 2,691 5,248 519 2,612

2014

Adjusted Non-current Non-current Revenue EBITDA assets Current assets liabilities Current liabilities £’000 £’000 £’000 £’000 £’000 £’000

Registry Domain Sales 2,801 1,091 3,741 3,397 570 4,235Registrar Domain Sales 1,550 (19) 4,454 1,992 227 1,652Enterprise including PremiumDomain Name Sales 1,612 1,500 – – – –Consultancy and other services 104 104 – – – –Group overheads includingcosts associated with publiccompany status – (952) – – – –

6,067 1,724 8,195 5,389 797 5,887

6. RevenueThe CentralNic Group’s revenue is generated from the following geographical areas: 2014 2013 £’000 £’000

Registry Domain SalesUK 935 952North America 840 898Europe 483 453ROW 543 284

2,801 2,587

Registrar Domain SalesUK 76 –North America 358 –Europe 491 –ROW 475 –Other revenues 150 –

1,550 –



6. Revenue continued 2014 2013 £’000 £’000

Enterprise including Premium Domain Name SalesNorth America 1,612 66

1,612 66

Consultancy and other ServicesUK 3 2North America 20 17ROW 81 379

104 398

Premium domain name trading was included within enterprise services in 2014, having previously been classified within registrysales. Consultancy revenues by nature are subject to annual variation depending on customer demand.

The following table shows customers that represent 10% or more of the registry domain sales: 2014 2013 £’000 £’000

Customer A 326 490Customer B 382 487Other customers 2,093 1,610

2,801 2,587

No single customer contributes greater than 10% or more of the registrar domain sales. The enterprise and premium domain namesales were principally driven by premium domain name sales of £1,610,000 in December 2014 which were made to a single client.

7. Profit before taxationThe profit before taxation is stated after charging the following amounts. 2014 2013 £’000 £’000

Employee benefit expense – wages and salaries 775 601Employee benefit expense – social security 98 66Employee benefit expense – share payments 33 14Staff Consultancy fees 370 241Directors’ remuneration – fees and salaries 576 220Directors’ remuneration – share payments 189 52Operating Leases – land & buildings 42 42Fees payable to the Company’s auditor for the audit of Parent Companyand consolidated financial statements 40 22Net (gain)/loss on foreign currency translation (47) 15Depreciation and amortisation expense 538 255

The Group auditors’ also received £75,000 in relation to the IPO which took place on the 2nd September 2013. This amountis included in the share premium account, categorised as issue costs and therefore is not included in the profit for the period.

The 2014 staff consultancy fees of £370,000 included fees incurred as a result of the acquisition of the trade of Internet.bs Corptotalling £86,000.


8. Employee informationThe average number of persons employed by the Group (excluding Directors) during the year were 20 (2013: 14), analysed bycategory, as follows: 2014 2013 £’000 £’000

Management and finance 1 1Technical 10 7Sales and Marketing 5 2Administrative 2 2Operations 2 2

Key management personnelTotal remuneration of key management personnel being the Directors and key senior personnel is £855,000 (2013: £745,000),and is set out below in aggregate for each of the categories specified in IAS24, related party disclosures.

2014 2013

Senior key Senior key Directors personnel Total Directors personnel Total £’000 £’000 £’000 £’000 £’000 £’000

Short-term benefits 558 86 644 591 92 683Share based payments expense 190 21 211 52 10 62

748 107 855 643 102 745

9. Dividends 2014 2013 £’000 £’000

Equity dividends paid during the year £nil (2013: 1.2 pence) – 638Equity dividends proposed after the year end (not recognised as a liability) – –

The Directors do not propose a final dividend for the year, but it remains their intention to consider the payment of a dividend whenappropriate and commercially prudent.

10. Finance income 2014 2013 £’000 £’000

Interest income on loans to related parties 18 6Interest income on loans to third parties 4 –Interest income on short-term bank deposits 1 1

23 7



11. Income tax expense 2014 2013 £’000 £’000

Current tax on profits for the year 166 137Adjustments in respect of previous years – 33

Current Income Tax 166 170Deferred Income Tax (10) 1

Income tax expense 156 171

A reconciliation of the current income tax expense applicable to the profit before taxation at the statutory tax rate to the currentincome tax expense at the effective tax rate of CentralNic is as follows: 2014 2013 £’000 £’000

Profit before taxation 520 701

Tax calculated at domestic tax rates applicable to profits in the respective countries 112 135

Tax effects of:Expenses not deductible for tax purposes 51 1Capital allowance in excess of depreciation 3 1Adjustments in respect of previous years – 33

Current income tax 166 170

The Company provides for income taxes on the basis of its income for financial reporting purposes, adjusted for items that are notassessable or deductible for income tax purposes, in accordance with the regulations of domestic tax authorities.

The effective rate of tax for the year is 30.1% (2013: 24.4%), when excluding the impact of the non-cash share based paymentsexpense the effective rate of tax for the year is 21.0% (2013: 22.3%)

In the UK, the applicable statutory tax rate for 2014 is 21% (2013: 23%).

In the USA, federal taxes are due at 15% on the first US$50,000 of taxable income and 25% thereafter. Under California taxlegislation an additional 8.85% of state tax is due on taxable income.

12. Earnings per shareEarnings per share has been calculated by dividing the consolidated profit after taxation attributable to ordinary shareholders bythe weighted average number of ordinary shares in issue during the period.

In calculating earnings per share prior to the Group reconstruction on 9 August 2013 whereby the Company became the newparent company of the CentralNic Group it is of limited significance to calculate earnings per share based on the historical equityof the CentralNic Group.

Accordingly, a pro forma earnings per share has been included based on the relevant number of shares in CentralNic Group Plcfollowing the reorganisation on 9 August 2013 but prior to the issue of shares by the Company to raise new funds and the actualshares in issue after that date. The calculation of earnings per share is based on the following earnings and number of shares.

Diluted earnings per share has been calculated on the same basis as above, except that the weighted average number of ordinaryshares that would be issued on the conversion of all the dilutive potential ordinary shares (arising from the Group’s share optionscheme and warrants) into ordinary shares has been added to the denominator. There are no changes to the profit (numerator)as a result of the dilutive calculation.


12. Earnings per share continued 2014 2013

Profit after tax attributable to owners (£’000) 364 530

Weighted average number of shares:Basic 60,047,493 52,814,446Effect of dilutive potential ordinary shares 5,328,727 5,328,727Diluted 65,376,220 58,143,173

Earnings per share:Basic (pence) 0.60 1.00Diluted (pence) 0.56 0.91

13. Property, plant and equipment Computer Furniture equipment and fittings Total £’000 £’000 £’000

CostAt January 2013 141 31 172Additions 46 3 49

At 31 December 2013 187 34 221Additions 124 2 126Disposals – – –

At 31 December 2014 311 36 347

Accumulated depreciationAt 1 January 2013 122 29 151Charge for the year 15 1 16

At 31 December 2013 137 30 167Charge for the year 89 1 90Disposals – – –

At 31 December 2014 226 31 257

Property, plant, and equipment, net

At 31 December 2014 85 5 90

At 31 December 2013 50 4 54

Depreciation of property, plant and equipment is included in administrative expenses in the combined and consolidated statement ofcomprehensive income.



14. Intangible assets Domain names Software Customer List Goodwill Total £’000 £’000 £’000 £’000 £’000

Cost or deemed costAt 1 January 2013 3,437 – – – 3,437Additions 15 206 – – 221Exchange Differences (5) – – – (5)

At 31 December 2013 3,447 206 – – 3,653

Additions 3 754 2,548 1,379 4,684Reclassification (300) – – – (300)Exchange Differences 14 – – – 14

At 31 December 2014 3,164 960 2,548 1,379 8,051

AmortisationAt 1 January 2013 1,478 – – – 1,478Charge for the year 239 – – – 239Exchange Differences (5) – – – (5)

At 31 December 2013 1,712 – – – 1,712

Charge for the year 222 99 127 – 448Reclassification (240) – – – (240)Exchange Differences 13 – – – 13

At 31 December 2014 1,707 99 127 – 1,933

Intangible assets, net

At 31 December 2014 1,457 861 2,421 1,379 6,118

At 31 December 2013 1,735 206 – – 1,941

Amortisation of intangible assets is included in administrative expenses in the combined and consolidated statement ofcomprehensive income.

Certain domain names previously held as intangible assets were reclassified to stock held for resale in the period.

Acquisition during the yearThe customer list and £500,000 of software assets were acquired through the business combination outlined in note 23.The customer list is amortised over ten years and the software amortised over five years.

GoodwillThe Group tests goodwill recognised through business combinations annually for impairment. Goodwill arose through the businesscombination outlined in note 23.

The recoverable amount of goodwill of £1,378,697 at 31 December 2014, is determined based on a value in use calculation usingcash flow projections from financial budgets approved by senior management covering a five year period. Cash flow projectionsbeyond the five year timeframe are extrapolated by applying a flat growth rate in perpetuity. The pre-tax discount rate applied to thecash flow projections is 10.0%. As a result of the analysis, management did not identify any impairment to the goodwill.


15. Deferred receivables 2014 2013 £’000 £’000

Amounts due from shareholders 711 694Deferred costs 205 –

916 694

Deferred receivables represent amounts due from Jabella Group Limited, a shareholder during the period. Amounts due fromJabella Group Limited were interest free until 31 August 2013, from which time the balance accrued interest at 2% above LIBOR(2014: £17,502, 2013: £5,727). The loan was granted in August 2011 for a term of five years, the balance is currently £711,236.The Directors consider the loan to be fully recoverable. The Directors consider that the fair value of this receivable is not materiallydifferent from the carrying value.

16. Investments £’000

At 31 December 2013 2Disposals (2)Additions 997

At 31 December 2014 997

During the year, the Company disposed of its 5% interest in DBS Mena, a company incorporated in the United Arab Emirates (UAE)upon it’s de-registration as a registered company within the United Arab Emirates.

The Company acquired less than 20% of the following undertakings which are incorporated in the United Kingdom (UK):

Place of incorporation/ Issued and paid-up/ Name establishment Principal activities registered capital Effective interests

Accent Media Ltd UK Domain registry operator Ordinary shares 12%

The Company owns more than 50% of the following undertakings which are incorporated in the United Kingdom, USA and theCommonwealth of The Bahamas:








Whois Privacy Corp Commonwealth of Dormant Ordinary shares 100%The Bahamas

Hoxton Domains Limited England and Wales Domain registrar services provider Ordinary shares 100%



17. Other receivables, deposits and prepayments 2014 2013 £’000 £’000

Trade receivables 475 206Accrued revenue 52 1Stock held for resale 60 –Deferred costs 1,185 –Prepayments 101 63Supplier payments on account 206 –Loan to third party 102 –Other receivables 152 46

2,333 316

No trade receivables were past due or impaired at 31 December 2014 (2013: nil). Deferred costs reflect the wholesale cost ofdomain names in the Internet BS registrar business acquired during the year. See note 23.

Supplier payments on account reflect payments to domain name registries for use against future wholesale domain purchaseswithin the Internet BS registrar business.

18. Cash and cash equivalentsFor the purpose of the statement of cash flows, cash and cash equivalents comprise the following:

2014 2013 £’000 £’000

CentralNic UK 2,310 4,274CentralNic USA 289 656TLD Registrar Solutions Ltd 38 2Internet Domain Service BS Corp 419 –

3,056 4,932

2014 2013 £’000 £’000

Amounts held on depositGBP 693 4,145USD 2,127 726EUR 233 61Other 3 –

3,056 4,932


19. Share capitalThe Company’s issued and fully paid share capital is as follows: Share capital Share premium Number £’000 £’000

At 1 January 2014 59,090,909 59 3,485Issued in connection with the acquisition of the trade and assetsof Internet.BS Corp on 16 June 2014 less share issue costs 2,090,738 2 1,450

At 31 December 2014 61,181,647 61 4,935

On 16 June 2014 the Company issued 2,090,738 new ordinary shares to Marco Rinaudo of 0.1 pence each at 70.5 pence per share.A share premium was created on the issue of these shares totalling £1,471,880. Issue costs in relation to the shares were £21,568.

The Company has no authorised share capital.

20. Non-current other payables 2014 2013 £’000 £’000

Deferred revenue 725 457

725 457

21. Deferred taxDeferred tax assets £’000

At 1 January 2013 –Deferred tax on excess tax deduction arising on share options 74


Deferred tax liabilities £’000

At 1 January 2013 107Transfers in the period (45)

At 31 December 2013 62Charged to the income statement 10


22. Trade and other payables and accruals 2014 2013 £’000 £’000

Accounts payable 319 270Accrued expenses 322 99Other taxes and social security 74 50Deferred consideration 837 230Contingent consideration 322 –Deferred revenue 2,725 1,438Customer Payments on account 1,040 324Other liabilities 32 16

5,671 2,427



23. Business combinationsOn 16 June 2014 the Group acquired the trade and assets of Internet.bs Corp a private company incorporated in theCommonwealth of the Bahamas and specialising in the retailing of internet domain names.

The following table summarises the consideration to acquire the trade and assets of Internet.bs Corp and the fair value of theassets and liabilities at the acquisition date in line with Group accounting policies.

Consideration £’000

Cash 1,710Equity instruments (2,090,738 ordinary shares) 1,474Deferred consideration 837Contingent consideration 322Adjustment for working capital (18)

Total consideration 4,325

Fair value recognised on acquisition £’000

Intangible assets – Customer list 2,548Intangible assets – Software 500Trade receivables 214Deferred costs 1,183Cash 129

4,574

LiabilitiesAccruals 30Payments on account 212Deferred revenue 1,385

1,627

Total identifiable net assets at fair value 2,947

Goodwill arising on acquisition 1,378

Purchase consideration 4,325

The fair value of the 2,090,738 ordinary shares issued as part of the consideration paid to continue the trade and assets ofInternet.bs Corp was based on the published share price on 16th June 2014 which was 70.5p.

The deferred consideration is due for payment on the first anniversary of the acquisition date.

The contingent consideration is dependent on the operating profit in the first year post acquisition and is due for payment on thefirst anniversary of the acquisition date. The fair value of the contingent consideration is based on the Directors’ assessment of thelikely operating profit for the year.


24. Related party disclosures(a) Ultimate controlling partyThe Company is not controlled by any one party.

CentralNic Group Plc has 100% ownership of CentralNic Limited, TLD Registrar Services Limited and Hoxton Domains Limited.

CentralNic Limited owns 100% of CentralNic USA, Whois Privacy Limited and GB.com Limited.

TLD Registrar Solutions Limited owns 100% of Internet Domain Service BS Corp and Whois Privacy Corp

(b) Related party transactions(i) ShareholdersBalances outstanding with shareholders: 2014 2013 £’000 £’000

Jabella Group Limited 711 694

Amounts due from Jabella Group Limited were interest free until 31 August 2013, from which time the balance accrued interest at2% above LIBOR (2014: £17,502, 2013: £5,727).

Transactions with two members of Erin Investments & Finance Limited: 2014 2013 £’000 £’000

Operating lease payments 42 42

(ii) Non-Executive DirectorsDuring the year CentralNic engaged with Schollmeyer and Rickert Rechtsanwaltsgesellschaft mBH, of which Thomas Rickert hasa controlling interest, to provide legal services in relation to the purchase of intangible assets and advise on potential acquisitions.The fees for 2014 were £95,000 (2013: £Nil).

25. CommitmentsCapital commitmentsCapital expenditure contracted for at the end of the reporting period but not yet incurred is as follows:

2014 2013

Property, plant and equipment – 74Intangible assets – 69

– 143

Operating lease commitmentsAt the end of each of the reporting periods, the minimum lease payments under non-cancellable leases are payable as follows:

2014 2013 £’000 £’000

Less than one year 42 42Between one and five years – 42

42 84

The Group leases office space located at 35-39 Moorgate, London, EC2R 6AR under an operating lease. The lease agreement wasentered into on 1st January 2010 for an initial term of 6 years with options to renew the lease. The Group leases equipment undervarious operating leases. These leases typically run for periods from one month to five years.



26. Share options and warrantsShare optionsThe share option scheme, which was adopted by CentralNic during 2013, was established to reward and incentivise the executivemanagement team and staff for delivering share price growth.

The share option scheme is administered by the Remuneration Committee.

There were 3,556,000 options granted during 2013, no options were granted in 2014. 5,000 options lapsed during the year,none of the awarded options have been exercised to date.

A charge of £222,269 (2013: £66,447) has been recognised in the statement of comprehensive income for the year relating tothese options.

These fair values were calculated using the Black Scholes option pricing model. The inputs into the model were as follows:

Share options Share options granted granted 1 June 2013 14 October 2013

Options granted 2,530,000 1,026,000Stock price 10p 55pExercise price 10p 57pInterest rate 5% 5%Volatility 75% 75%Time to maturity 10 years 10 years

The expected volatility was determined with reference to similar entities trading on AIM.

Details of the share options outstanding at the year end are as follows:

31 Dec 2014 31 Dec 2013

Number WAEP* Number WAEP*

Outstanding at 1 January 3,556,000 23p – –Granted during year – – 3,556,000 23pExpired during year – – – –Lapsed during year 5,000 10p – –Outstanding at 31 December 3,551,000 23p 3,556,000 23pExercisable at 31 December 968,895 23p 378,639 23p

* weighted average exercise price.

The weighted average remaining contractual life of the options outstanding at the statement of financial position date is 8.6 years.

Options are exercisable in accordance with the contracted vesting schedules. Options granted in June 2013 may be exercisedin respect of 1/12 of the Option Shares from 1 September 2013 and a further 1/12 of the Option Shares following the expiry ofeach subsequent 3 month period. Options granted on the 14th October 2013 may be exercised 3 years after the date of grant.

WarrantsOn 12 August 2013, CentralNic Group executed a warrant instrument to create and issue warrants to Zeus Capital to subscribefor an aggregate of 1,772,727 ordinary shares. The warrants will expire six years after admission and were exercisable after thefirst anniversary of admission (2nd September 2014) at the placing price of 55p. The ordinary shares to be allotted and issued onthe exercise of any or all of the warrants will rank for all dividends and other distributions declared after the date of the allotment ofsuch shares but not before such date and otherwise pari passu in all respects with the ordinary shares in issue on the date ofsuch exercise allotment.


26. Share options and warrants continuedThese fair values were calculated using the Black Scholes warrant pricing model. The inputs into the model were as follows:

Warrants issued 12 August 2013

Warrants granted 1,772,727Stock price 55pExercise price 55pInterest rate 5%Volatility 75%Time to maturity 6 years

A charge of £675,409 was recognised in the share premium account in 2013.

27. Financial instrumentsThe CentralNic Group is exposed to market risk, credit risk and liquidity risk arising from financial instruments. The CentralNicGroup’s overall financial risk management policy focusses on the unpredictability of financial markets and seeks to minimisepotential adverse effects on the CentralNic Group’s financial performance. The Group does not trade in financial instruments.

(a) Financial risk management frameworkThe Directors’ risk management policies are established to identify and analyse the risks faced by the CentralNic Group, to setappropriate risk limits and controls, and to monitor risks and adherence to limits.

(i) Market riskForeign currency riskThe CentralNic Group is exposed to foreign currency risk on transactions and balances that are denominated in a currency otherthan its functional currency, primarily the US$. Foreign currency risk is monitored closely on an on-going basis to ensure that thenet exposure is at an acceptable level.

The CentralNic Group’s exposure to foreign currency risk is minimal as it trades in predominately US Dollars, Euros and GB PoundSterling. Exposure to currency risk is negated by the CentralNic Group holding adequate reserves in these three currencies tomeet trading and provisioned obligations as the need arises.

Interest rate riskInterest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes inmarket interest rates. The CentralNic Group’s exposure to interest rate risk arises mainly from interest-bearing financial assets andliabilities. The Directors’ policy is to obtain the most favourable interest rates available.

As at each of 31 December 2013 and 2014, all of the CentralNic Group’s interest-bearing financial instruments bore interest atfixed interest rates. 2014 £’000

Cash and bank balances 3,056Effect of interest rate change of 100 basis points +/- 30

Equity price riskThe CentralNic Group does not have any quoted investments as at each of 31 December 2013 and 2014 and as such does nothave significant exposure to equity price risk.



27. Financial instruments continued(ii) Credit riskThe CentralNic Group’s exposure to credit risk arises mainly from counterparty’s failure to meet its obligation to settle a financialasset, primarily prepayments and other receivables. The Directors consider the CentralNic Group’s exposure to credit risk arisingfrom trade receivables to be minimal as the CentralNic Group is generally paid at the outset or in advance. Credit risk arising fromother receivables is controlled through monitoring procedures, including credit approvals and credit limits. For cash and bankbalances, the Directors minimise the CentralNic Group’s credit risk by dealing exclusively with banks and financial institutioncounterparties with high credit ratings.

The carrying amounts of financial assets at the end of the reporting periods represent the maximum credit exposure.

2014 2013 £’000 £’000

Deferred receivables 916 694Other receivables, deposits and prepayments 2,333 316Cash and bank balances 3,056 4,932

6,305 5,942

(iii) Liquidity riskLiquidity risk is the risk that the CentralNic Group will encounter difficulty in settling its financial obligations that are settled with cashor another financial asset. The Directors’ objective is to maintain, as much as possible, a level of its cash and bank balancesadequate enough to ensure that there will be sufficient liquidity to meet its liabilities when they fall due.

The following set forth the remaining contractual maturities of financial liabilities as at:

£’000 Carrying amount Total Within 1 year 1 – 5 years

31 December 2013Trade and other payables and accruals 2,884 2,884 2,427 457

2,884 2,884 2,427 457

£’000 Carrying amount Total Within 1 year 1 – 5 years

31 December 2014Trade and other payables and accruals 6,396 6,396 5,671 725

6,396 6,396 5,671 725

(b) Capital risk managementThe Directors define capital as the total equity of CentralNic. The Directors’ objectives when managing capital are to safeguardthe CentralNic Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for otherstakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capitalstructure, the Directors may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new sharesor sell assets to reduce debt.

The Directors manage CentralNic’s capital based on debt-to-equity ratio. The debt-to-equity ratio is calculated as net debt dividedby total equity. Net debt is calculated as total liabilities less cash and cash equivalents.


27. Financial instruments continuedThe debt-to-equity ratio of the CentralNic Group as at the end of each of the reporting periods was as follows:

2014 2013 £’000 £’000

Total liabilities 6,684 2,884Less: cash and bank balances (3,056) (4,932)

Net debt/(cash) 3,628 (2,048)

Total equity 6,836 4,808

Debt-to-equity ratio 0.53 n/a

(c) Fair values of financial instrumentsThe carrying amounts of the financial assets and liabilities reported in the combined and consolidated financial statementsapproximate their fair values.

2014 2013

£’000 Carrying amount Fair value Carrying amount Fair value

Other receivables, deposits and prepayments 2,333 2,333 316 316Deferred receivables 916 916 694 694Cash and bank balances 3,056 3,056 4,932 4,932

6,305 6,305 5,942 5,942

Trade and other payables and accruals 6,396 6,396 2,884 2,884

6,396 6,396 2,884 2,884

(d) Fair value hierarchyFinancial instruments carried at fair value are analysed by the levels in the fair value hierarchy. The different levels are defined as follows:

Level 1: Fair value measurements are derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: Fair value measurements are derived from inputs other than quoted prices included within level 1 that are observablefor the asset or liability, either directly or indirectly; and

Level 3: Fair value measurements derived from valuation techniques that include inputs for the asset or liability that are notbased on observable market data (unobservable inputs).

As at 31 December 2013 and 2014, there were no financial instruments carried at fair values.


Company balance sheetas at 31 December 2014

2014 2013 Note £’000 £’000

ASSETSFixed assetsInvestments 6 252 50

Current assetsOther debtors, deposits and prepayments 7 6,395 4,045

6,395 4,045

Total assets 6,647 4,095

LIABILITIESCurrent liabilitiesCreditors – amounts falling due within one year 11 1,305 72

1,305 72Total liabilities 1,305 72

Net assets 5,342 4,023

CAPITAL AND RESERVESShare capital 8 61 59Share premium 9 4,935 3,485Share based payments reserve 12 964 742Retained earnings 10 (618) (263)

Shareholders funds 5,342 4,023

These financial statements were approved and authorised for issue by the Board of Director’s on 28 April 2015 and weresigned on it’s behalf by:


Company Number: 08576358



Company statementof capital and reservesfor the period ended 31 December 2014

Share Share Share based Retained capital Premium Payments earnings Total £’000 £’000 £’000 £’000 £’000

Balance at incorporation 50 – – – 50

Total comprehensive income for the year – – – (263) (263)Issue of new shares 9 4,991 – – 5,000Share issue costs – (1,506) – – (1,506)Share based payments – – 742 – 742

Balance as at 31 December 2013 59 3,485 742 (263) 4,023Total comprehensive income for the year – – – (1,330) (1,330)Issue of new shares 2 1,472 – – 1,474Share issue costs – (22) – – (22)Share based payments – – 222 – 222Dividend received – – – 975 975

Balance as at 31 December 2014 61 4,935 964 (618) 5,342

Share capital represents the nominal value of the Company’s cumulative issued share capital. Share premium represents thecumulative excess of the fair value of consideration received for the issue of shares in excess of their nominal value lessattributable share issue costs and other permitted reductions. Retained profits represent the cumulative value of the profits notdistributed to shareholders, but retained to finance the future capital requirements of the Company. Share based paymentsreserve represents the cumulative value of share based payments recognised through equity. Dividend received during the yearreflects a dividend declared by a subsidiary company.



2014 2013 £’000 £’000

Cash flow from operating activitiesLoss before taxation (1,330) (263)

Adjustments for:Depreciation of property, plant and equipment – –Amortisation of Intangible Assets – –Share based payments – 66

(1,330) (197)Operating profit before working capital changesIncrease in other debtors, deposits and prepayments (2,330) (4,045)Increase in other payables and accruals 2,186 72

Net cash outflow from operating activities (1,474) (4,170)Income tax paid – –

Net cash outflow from operating activities (1,474) (4,170)

Capital expenditure and financial investmentPurchase of investments – (50)

Net cash outflow from capital expenditure and financial investment – (50)

FinancingProceeds from issuance of ordinary shares 1,474 4,220

Net cash inflow from financing 1,474 4,220

Net increase/(decrease) in cash and cash equivalents – –Cash and cash equivalents at beginning of the period – –

Cash and cash equivalents at end of the period – –

The notes on pages 61 to 64 form an integral part of these financial statements

Company cash flow statementfor the period ended 31 December 2014


Notes to the Companyfinancial statementsfor the period ended 31 December 2014

1. General informationNature of operationsCentralNic Group Plc is the UK holding company of a group of companies which are engaged in the provision of independentglobal domain name registry services. The Company was incorporated on 19 June 2013 to become the holding company ofthe Group following a reorganisation which took place on 9 August 2013. The Company is registered in England and Wales.Its registered office and principal place of business is 35-39 Moorgate, London, EC2R 6AR.

2. Basis of preparationThe financial statements have been prepared in accordance with the historical cost convention and in accordance with applicableUnited Kingdom law and United Kingdom accounting standards. The principal accounting policies are described below. They haveall been applied consistently throughout the period.

3. Significant accounting policies(a) Going concernAt 31 December 2014, the Company had net current assets of £5,090,000 with the main current asset being amounts owed fromits subsidiary TLD Registrar Solutions Limited amounting to £4,227,000. The Company has assessed its ongoing costs with cashgenerated by its subsidiary to ensure that it can continue to settle its debts as they fall due.

The Directors have, after careful consideration of the factors set out above, concluded that it is appropriate to adopt the goingconcern basis for the preparation of the financial statements and the financial statements do not include any adjustments thatwould result if the going concern basis was not appropriate.

(b) InvestmentsInvestments held as fixed assets are stated at cost less provision for impairment.

(c) TaxationCurrent tax, including UK corporation tax and foreign tax, is provided at amounts expected to be paid (or recovered) using the taxrates and laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the balance sheet date wheretransactions or events that result in an obligation to pay more tax in the future or a right to pay less tax in the future have occurredat the balance sheet date. Timing differences are differences between the Company’s taxable profits and its results as stated in thefinancial statements that arise from the inclusion of gains and losses in tax assessments in periods different from those in whichthey are recognised in the financial statements.

A net deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis of all available evidence,it can be regarded as more likely than not that there will be suitable taxable profits from which the future reversal of the underlyingtiming differences can be deducted.

Deferred tax is not recognised when fixed assets are revalued unless by the balance sheet date there is a binding agreement tosell the revalued assets and the gain or loss expected to arise on sale has been recognised in the financial statements. Neither isdeferred tax recognised when fixed assets are sold and it is more likely than not that the taxable gain will be rolled over, beingcharged to tax only if and when the replacement assets are sold.

Taxation arising on disposal of a revalued asset is split between the profit and loss account and the statement of total recognisedgains and losses on the basis of the tax attributable to the gain or loss recognised in each statement.


Notes to the Companyfinancial statements continued

4. Loss for the financial periodThe Company has taken advantage of section 408 of the Companies Act 2006 and, consequently, a profit and loss account forthe Company alone has not been presented. The Company’s loss for the financial period was £1,330,000. The Company’s lossfor the financial year has been arrived at after charging auditor’s remuneration payable to Crowe Clark Whitehill LLP for auditservices to the Company of £39,758.

5. Employees and Directors’ remunerationStaff costs incurred during the period by the Company were as follows: 2014 2013 £’000 £’000

Non-executive Directors fees 141 165Executive Directors 606 –

747 165

The executive management team were remunerated by Centralnic Limited in 2013.

The average number of employees of the Company during the period was: 2014 2013 Number Number

Directors and management 2 2

2 2

6. Investments £’000

At 31 December 2013 50Additions 202



6. Investments continuedThe Company owns more than 20% of the following subsidiary undertakings which are incorporated in the United Kingdom,USA and the Commonwealth of The Bahamas:








Whois Privacy Corp Commonwealth of Domain registrar services provider Ordinary shares 100%The Bahamas

Hoxton Domains Limited England and Wales Aftermarket domain services Ordinary shares 100%

On 9 August 2013, the CentralNic Group, previously headed by Centralnic Limited underwent a re organisation under whichCentralNic Limited’s shareholders in their entirety exchanged their shares for shares in CentralNic Group plc a newly formedcompany, which then became the ultimate parent company of the Group.

7. Debtors 2014 2013 £’000 £’000

Amounts owed by Group undertakings 6,324 4,011Other debtors 51 34Deferred tax asset 20 –

6,395 4,045

8. Share capitalDetails of the Company’s share capital are set out in Note 19 to the consolidated financial statements.

9. Share premium account 2014 2013 £’000 £’000

Balance bought forward 3,485 –Premium on issue of new shares 1,472 4,991Share issue costs (22) (1,506)

Balance carried forward 4,935 3,485


10. Retained earnings 2014 2013 £’000 £’000

Balance brought forward (263) –Loss for the financial period (1,330) (263)Dividend received 975 –

Balance carried forward (618) (263)

11. Creditors: Amounts falling due within one year 2014 2013 £’000 £’000

Trade creditors 44 –Accruals and deferred income 102 72Deferred consideration 837 –Contingent consideration 322 –

1,305 72

12. Share based payments reserve 2014 2013 £’000 £’000

Balance brought forward 742 –Share based payments expense 222 742

Balance carried forward 964 742

13. Reconciliation of movements in shareholders’ funds 2014 2013 £’000 £’000

Loss for the financial period (1,330) (263)Issue of new shares 1,474 5,050Share issue costs (22) (1,506)Share based payments 222 742Dividend received 975 –Opening shareholders’ funds 4,023 –

Closing shareholders’ funds 5,342 4,023

Notes to the Companyfinancial statements continued


Shareholder information

Financial calendarAnnual General MeetingThe Annual General Meeting will be held on Thursday,the 28th May 2015 at 10.00am at the offices of theCompany’s solicitors:

DWF LLP20 Fenchurch StreetLondon EC3M 3AG

Announcements• Half-year results for 2015 are expected in September 2015.

• Full year results for 2015 are expected in April 2016.

Dates are correct at the time of printing, but are subjectto change.

DirectorsJohn Swingewood (Chairman)

Benjamin Crawford (Chief Executive Officer)

Glenn Hayward (Executive Director)

Robert Pooke (Executive Director)

Samuel Dayani (Non-Executive Director)

Thomas Rickert (Non-Executive Director)

Thomas Pridmore (Non-Executive Director)

Registered office35-39 MoorgateLondon EC2R 6AR

Company SecretaryGlenn Hayward

Company websitewww.centralnic.com

Nominated Adviser and BrokerZeus Capital Limited82 King StreetManchester M2 4WQ

23 Berkeley SquareMayfairLondon W1J 6HE

3 BrindleyplaceBirmingham B1 2JB

Joint BrokerPeel Hunt LLPMoor House120 London WallLondon EC2Y 5ET

AuditorsCrowe Clark Whitehill LLPSt Bride’s House10 Salisbury SquareLondon EC4Y 8EH

Solicitors to the CompanyDWF LLP20 Fenchurch StreetLondon EC3M 3AG

Solicitors to the Nominated Adviser and BrokerDAC Beachcroft LLP100 Fetter LaneLondon EC4A 1BN

Financial PRAbchurch Communications125 Old Broad StLondon EC2N 1AR

BankersHSBC Bank plc89 Buckingham Palace RoadLondon SW1W 0QL


Company RegistrarsCapita Asset ServicesThe Registry34 Beckenham RoadBeckenhamKent BR3 4TU

Capita Asset Services is our registrar and they offer many servicesto make managing your shareholding easier and more efficient.

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To register for the Share Portal just visit www.capitashareportal.com.All you need is your investor code, which can be found on yourshare certificate or your dividend tax voucher.

Customer support centreAlternatively, you can contact Capita’s Customer Support Centrewhich is available to answer any queries you have in relation toyour shareholding:

By phone – UK – 0871 664 0300 (UK calls cost 10p per minuteplus network extras). From overseas – +44 20 8639 3399.Lines are open 9.00am to 5.30pm, Monday to Friday, excludingpublic holidays.

By email – [email protected]

By post – Capita Asset Services, The Registry,34 Beckenham Road, Beckenham, Kent, BR3 4TU.

Sign up to electronic communicationsHelp us to save paper and get your shareholder informationquickly and securely by signing up to receive your shareholdercommunications by email.

Registering for electronic communications is very straightforward.Just visit www.capitashareportal.com. All you need is yourinvestor code, which can be found on your share certificate oryour dividend tax voucher.

Donate your shares to charityIf you have only a small number of shares which are uneconomicalto sell you may wish to donate them to charity free of chargethrough ShareGift (Registered Charity10528686). Find out moreat www.sharegift.org.uk or by telephoning 020 7930 3737.

Share fraud warningShare fraud includes scams where investors are called out ofthe blue and offered shares that often turn out to be worthlessor non-existent, or an inflated price for shares they own. Thesecalls come from fraudsters operating in ‘boiler rooms’ that aremostly based abroad.

While high profits are promised, those who buy or sell shares inthis way usually lose their money.

The Financial Conduct Authority (FCA) has found most sharefraud victims are experienced investors who lose an average of£20,000, with around £200m lost in the UK each year.

PROTECT YOURSELFIf you are offered unsolicited investment advice, discountedshares, a premium price for shares you own, or free company orresearch reports, you should take these steps before handingover any money:

• Get the name of the person and organisation contacting you.

• Check the Financial Services Register athttp://www.fca.org.uk/ to ensure they are authorised.

• Use the details on the FCA Register to contact the firm.

• Call the FCA Consumer Helpline on 0800 111 6768 if thereare no contact details on the Register or you are told they areout of date.

• Search our list of unauthorised firms and individuals to avoiddoing business with.

Shareholder information continued


REMEMBER: if it sounds too good to be true, it probably is!

If you use an unauthorised firm to buy or sell shares or otherinvestments, you will not have access to the FinancialOmbudsman Service or Financial Services CompensationScheme (FSCS) if things go wrong.

REPORT A SCAMIf you are approached about a share scam you should tell the FCAusing the share fraud reporting form at http://www.fca.org.uk/scams, where you can find out about the latest investment scams.You can also call the Consumer Helpline on 0800 111 6768.

If you have already paid money to share fraudsters you shouldcontact Action Fraud on 0300 123 2040.

Identity theftTips for protecting your shares in the Company:

• Ensure all your certificates are kept in a safe place or holdyour shares electronically in CREST via a nominee.

• Keep correspondence from us and Capita in a safe place anddestroy any unwanted correspondence by shredding.

• If you change address, inform Capita in writing or update youraddress online via the shareholder portal. If you receive a letterfrom Capita regarding a change of address but have notmoved, please contact them immediately.

• Consider having your dividend paid directly into your bank.This will reduce the risk of the cheque being intercepted orlost in the post. If you change your bank account, informCapita of the details of your new account. You can do thisby post or online via the shareholder portal.

• If you are buying or selling shares, only deal with brokersregistered and authorised to carry out that type of business.

• Be wary of phone calls or e-mails purporting to come from usor Capita asking you to confirm personal details or details ofyour investment in our shares. Neither we nor Capita will everask you to provide information in this way.


Top Level Domain or ‘TLD’The suffix attached to internet domain names e.g., .com, .net

Second Level Domain or ‘SLD’A domain that is directly below a top-level domain e.g. uk.com

Country Code Top Level Domain or ‘ccTLD’An Internet top-level domain generally used or reserved for acountry, a sovereign state, or a dependent territory e.g., .uk, .jp

Domain Name System or ‘DNS’A hierarchical distributed naming system for computers,services, or any resource connected to the Internet or aprivate network

Domain Name RegistrarAn organisation or commercial entity that manages thereservation of Internet domain names

Registry Service ProviderA company that runs the operations of a TLD on behalf of theTLD owner or licensee. The registry service provider keeps themaster database and generates zone files to allow computers toroute Internet traffic using the DNS

The Internet Corporation for Assigned Namesand Numbers or ‘ICANN’A non profit private organisation that was created to oversee anumber of Internet-related tasks previously performed directly onbehalf of the U.S. government

Registry OperatorAn entity that maintains the database of domain names for a giventop-level domain and generates the zone files which convertdomain names to IP addresses. It is responsible for domain nameallocation and technically operates its top-level domain

Glossary

CentralNic’s global business footprint

Business footprint

Designed and produced by fourthquarter.co.uk

Contents

Highlights 1

Introduction to CentralNic 2

CentralNic’s key advantages 4

Chairman’s statement 8

Chief Executive’s report 10

Strategic report 12

Chief Financial Officer’s report 15

Board of Directors 18

Directors’ report 20

Corporate governance 24

Remuneration report 27

Independent Auditors’ report 30

Financial statements 31

Shareholder information 65

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Annual Report 2014

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